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Land Acquisition

4. General effect of vesting. (1) The area shall be deemed to include all assets, rights, leaseholds, powers, authority and privileges and all property, movable and immovable, including lands, buildings, structures, shops of whatever nature or other properties and all other rights and interests in, or arising out of, such properties as were immediately before the commencement of this Act in the ownership, possession, power or control of any person or the State Government of Uttar Pradesh, as the case may be, and all registers, maps, plans, drawings and other documents of whatever nature relating thereto. Continue reading →

1. The question for our consideration relates to the interpretation of Section 87 of the Andhra Pradesh (Telangana Area) Land Revenue Act, 1317 Fasli and the meaning of the expression ‘clerical error’. The further question is whether a ‘clerical error’ can be corrected “at any time” or only within a reasonable time.

2. In our opinion, the correction sought to be made by the respondents is not a ‘clerical error’ and so the further question really does not arise. However, the expression “at any time’ cannot be interpreted to stretch over a period of 25 years, as in the present case.

Land Acquisition Proceedings

3. On 24th May, 1963 a notification was issued under the provisions of Section 4 of the Land Acquisition Act, 1894 (the Land Acquisition Act). The entire acquisition was of a few thousand acres comprising of dozens of survey numbers. Amongst others, the acquisition included survey nos. 1009, 1043 to 1065 comprising of 1110.07 acres in Kukatpally Village, Balanagar Mandal in Ranga Reddy District of Andhra Pradesh. The entire acquisition was for the purpose of a Housing Scheme of the Andhra Pradesh Housing Board (APHB) framed under Section 22-A of the Andhra Pradesh Housing Board Act, 1956.

4. As is evident, the area was extremely large but it is recorded in paragraph 4 of the Land Acquisition Award that: “The lands under acquisition were got surveyed by the Measuring Circle Inspector of this office and were got checked by the G.D. Inspector of Hyderabad District, and areas of the lands under Acquisition were approved by the Land Record Assistant. The Areas as approved after survey and check are adopted in this Award.”

5. As far as Survey No. 1009 is concerned an area of 661.04 acres was sought to be acquired. The notification does not indicate that only a part of Survey No. 1009 was sought to be acquired. There was no indication that 661.04 acres of land is only a part of the entire extent of Survey No.1009. In fact, as suggested in the Award, the entire Survey No. 1009 along with the entire survey nos. 1043 to 1065 (along with several dozen other survey numbers) were sought to be acquired by the said notification.

6. In paragraph 29 (b) of the Land Acquisition Award it is further stated:

“The Special Deputy Collector Patancheru has informed vide his Lr. No.B1/341/67 dated 6.8.67 that he has acquired 5 acres 21 guntas out of survey number 1009 measuring 666.25 acres of Kukatpally village. The area tallies on the spot hence an area 5 acres 21 guntas is deleted from the area of survey no.1009 of Kukatpally and award is being passed for the balance area of 661.64 acres out of survey number 1009.”

7. At this stage, we may mention that an area of 5.21 acres in Survey No. 1009 was earlier acquired for the Manjeera Water Works Department and hence 661.04 acres was sought to be acquired by the said notification.

8. The acquisition proceedings concluded without any objection having been raised by the respondents who were admittedly owners of the land. An Award was passed by the Special Deputy Collector, Land Acquisition, Andhra Pradesh Housing Board, Hyderabad on 10th June, 1968 and Survey No. 1009 was described in the Award as “dry lands full of rocks unfit for cultivation and no cultivation is being done.”

9. On 24th June, 1968 the APHB took possession of all the acquired lands including entire survey nos. 1009 and 1043 to 1065.

10. Dissatisfied with the award of compensation, the respondents filed a reference under Section 18 of the Land Acquisition Act. In the claim petition it was stated that survey nos. 1009 and 1043 to 1065 comprise of 1121.17 acres. However, compensation was awarded only for 1104.26 acres (5.21 acres relating to Manjeera Water Works Department was not included in this calculation). Accordingly, it was stated that “11 acres and odd, they being the property of the claimant, it is not acquired and they remain to be the property of the claimant.”

It is significant to note that the 11 acres and odd which was sought to be excluded from the acquisition proceedings by the respondents was not specified or identified inasmuch as the survey number of this un-acquired area was not stated or earmarked by the claimants. It is much later that the respondents came to the conclusion that the allegedly un-acquired 11 acres and odd was a part of Survey No. 1009.

11. Be that as it may, the compensation was enhanced and ultimately, settled by this Court sometime in 1992. We are not concerned with the details of the compensation proceedings any further but have mentioned it only for the purpose of indicating that:

i) The entire area of survey nos. 1009 and 1043 to 1065 was acquired. The acquisition consisted of huge areas and physical measurements were carried out, surveyed, checked and approved as per the revenue records.

ii) Possession of the entire land was taken by the APHB for a Housing Scheme.

iii) Although the respondents made a submission that 11 acres and odd was not acquired, this area was not identified or specified as being a part of any particular survey number or even earmarked.

12. On 7th December, 1993 the respondents moved an application under the provisions of Section 87 of the Andhra Pradesh (Telangana Area) Land Revenue Act, 1317 Fasli (for short the Act). In the application, it was stated that as per the revenue record pertaining to Survey No. 1009 the land area is actually 672.14 acres and it incorrectly shows the area less by 11.10 acres. It was stated in the application that this area of 11.10 acres was in possession of the respondents.

It is for the first time in 1993 that 11.10 acres was attributed to Survey No. 1009. Section 87 of the Act reads as follows:- “Settlement Officer to correct clerical and other errors admitted by all parties and application for correction of name to be made within two years: The Director of Settlements and on making over the settlement records to the Collector, the Collector may, at any time, correct or cause to be corrected any clerical error or errors admitted by the party concerned.

The aforesaid officer shall hear all applications made within two years after the introduction of the settlement, for the correction of any wrong entry of a pattadar’s name in the register referred to in the preceding section and if satisfied about the error whether such error has been made through negligence, fraud, or collusion shall correct the same, notwithstanding that the party concerned does not admit the error but no such application shall be entertained after two years, unless reasonable cause is shown to the said officer for the delay, and in such cases if any error is proved it shall not be corrected without obtaining the sanction of the Government.”

13. Acting on the application, the District Collector requested the Assistant Director, Survey and Land Records for a survey of Survey No. 1009 and to fix the boundaries. The Assistant Director issued notice to the APHB on 7th July, 1994 for the purposes of carrying out the survey but according to the APHB the notice was not received. In our opinion, the non-receipt of the notice is hardly of any relevance.

14. In any event, the Assistant Director submitted a Report on 5th August, 1994 to the District Collector. In his Report, it was concluded that the area of Survey No. 1009 was actually 687.03 acres. This comprised of 661.04 acres (subject matter of consideration before us) and 5.21 acres earlier acquired for Manjeera Water Works Department. Therefore, according to the Assistant Director there was an excess of 20.18 acres that had not been acquired. It was also noted that IDL was in possession of some extent of Survey No. 1009. No specification or details were provided of the area and location of the land in possession of IDL.

15. It is also significant to note that while the respondents had been contending that there was an excess of 11.10 acres that had not been acquired, the Assistant Director came to the conclusion that 20.18 acres had not been acquired.

16. At this stage, we may take a slight diversion and refer to a Circular dated 15th October, 1994 issued by the Commissioner of Survey, Settlements and Land Records. This Circular concerns itself with Section 87 of the Act it seeks to explain a ‘clerical error’ that could be rectified.

17. The relevant portions of the Circular dated 15th October, 1994 are paragraphs 4 and 5 and they read as follows:-

“Clarification: There is no time limit for entertaining clerical errors, and District: Revenue Officer is competent to entertain clerical errors. The time limit is prescribed only for errors other than clerical errors. For rectification of errors other than clerical errors condonation of delay is required, for which District: Revenue Officer alone is competent. However the District: Revenue Officer is not competent to carryout correction other than clerical errors without the approval of the Commissioner, Survey, Settlement and Land Records.

Clarification: Section 87 of the Land Revenue Act 1317 Fasli does not provide definition of clerical errors and errors other than clerical errors.

The clerical errors are minor errors which do not involve alteration in area, change of classification, or change of name of the pattedar. A few examples of errors, which come under the category of clerical errors, are furnished below:-

a. Name of the Pattedar misspelt.

b. Inter-change of survey numbers.

c. Survey no. missing in the survey map.

d. Area is calculated wrongly though measurement on ground and records support the correct area.

Since the definition of clerical error and errors other than clerical errors is not there in the Act, it is not proper to leave it to the judgment of Assistant Director Survey and Land Records whether particular survey error falls under the category of clerical error or errors other than clerical error.

Therefore, the Assistant Director, Survey and Land Records shall send detailed technical report to Director, Survey Settlement and Land Records, regarding proposed error. This is purely a technical and non-statutory function. The report so sent shall be examined at Directorate whether the error falls under the category of clerical error or error other than clerical error and the fact will be communicated to Assistant Director Survey and Land Records.

On obtaining clearance from the Directorate, the Assistant Director shall send the file to District Revenue Officer to dispose of the case at District Revenue Officers level under Section 87 of the Land Revenue Act, if the error is a clerical error. If the error is other than clerical error, the District Revenue Officer, shall send proposals to Commissioner Survey Settlement and Land Records duly condoning the delay as per rules for disposal of the case by Commissioner, Survey, Settlement and Land Records, under Section 87-A of Land Revenue Act 1317 fasli.”

18. In response to the application made by the respondents under Section 87 of the Act and the Report given by the Assistant Director on 5th August, 1994, the Director of Settlements, Survey and Land Records wrote to the District Collector on 19th April, 1995 acknowledging that there is no record of any actual measurement of Survey No. 1009 since it is a large tract of land. He also stated that variation in calculating the area apparently in view of the rocky nature of the land could be between 10% and 30%. The fact that all the survey numbers had been measured, as mentioned in the Award, was lost sight of.

19. Nevertheless, the Director stated that the measurement exercise undertaken by the Assistant Director is technically correct and the area of Survey No. 1009 is actually 687.03 acres while the recorded area is 666.25 acres (which includes the land acquired for Manjeera Water Works Department). Therefore, according to the Director the variation is to the extent of 20.18 acres. The Director also expressed the opinion that the measurement error falls within the category of ‘clerical error’ as mentioned in the Circular dated 15th October, 1994 and necessary corrective action ought to be taken.

20. It is not clear how the APHB learnt of the Report of the Assistant Director and its acceptance by the Director but in any event, on 10th June, 1996 objections were raised by the APHB before the District Collector to the Report and the decision to correct the revenue records.

21. On receipt of the objections, the District Collector referred the case to the Commissioner of Survey, Settlements and Land Records, Hyderabad on 1st August, 1996 to consider rectification of the measurement error.

22. On 15th September, 1997 the Commissioner directed the District Revenue Officer to take action in terms of the Circular of 15th October, 1994 since there was a clerical error in terms of paragraph 5 of the Circular. However, the Commissioner also directed that before passing any orders under Section 87 of the Act the APHB should be heard.

23. It appears that the APHB was thereafter heard by the District Revenue Officer who then passed an order on 9th June, 1998 concluding that in fact the area of Survey No. 1009 was 687.03 acres and that there was an excess of 20.18 acres that had not been acquired. This was as against the claim of the respondents that 11.10 acres had not been acquired. The District Revenue Officer concluded that the APHB had no right over the area of 20.18 acres and that necessary corrections in terms of Section 87 of the Act should be made.

24. Feeling aggrieved by the order passed by the District Revenue Officer which appears to have been accepted by the higher authorities the APHB filed an appeal before the Commissioner (Appeals) under Section 158 of the Act. This Section reads as follows:

“Appeal from order of Revenue Officer-

(1) Except as otherwise provided in this Act for any other law for the time being in force, an appeal shall lie against any decision or order passed by a Revenue Officer under this Act or any other law for the time being in force, to his immediate superior officer whether such decision or order may have been passed in the exercise of original jurisdiction or on appeal.

(2) Subject to the provisions of the Andhra Pradesh (Telangana Area) Board of Revenue Regulation, 1358 F., (Regulation LX of 1358F.) an appeal shall lie to the Government from any decision or order passed by a Collector or Settlement Commissioner except in the case of any decision or order passed by such officer on second or third appeal.

(3) and

(4) xxx xxxxxx

25. On 24th March, 1999 the Commissioner (Appeals) passed an ex parte order in the appeal filed by the APHB for maintaining status quo.

26. It appears that in spite of the status quo order passed by the Commissioner (Appeals) the revenue records were corrected by issuing a Supplementary Sethwar. Be that as it may, the respondents challenged the ex parte order dated 24th March, 1999 by filing a writ petition in the Andhra Pradesh High Court on 5th April, 1999. The writ petition was numbered as the W.P. No. 7940 of 1999. Among the grounds taken by the respondents, in the writ petition, was that the appeal filed by the APBH was beyond time and an ex parte order ought not to have been passed by the Commissioner (Appeals).

27. On 10th August, 2000 the learned Single Judge hearing the writ petition passed an interim order to earmark the land in possession of the APHB and whether it is occupying 661.04 acres or more. In compliance with the interim order, the Assistant Director gave a Report dated 23rd June, 2001 to the effect that the area of Survey No. 1009 is 666.25 acres including 5.21 acres with Manjeera Water Works Department. It is important to note that the Assistant Director did not report that the area of Survey No. 1009 was more than 666.25 acres.

In other words, there was a turn-around from the earlier decisions taken in this regard. It was reported as follows: “After fixing the boundaries as stated above the land available within such boundaries surveyed with the help of theodolite (traverse survey) and arrived the total area as Ac.666.25 gts. which is tallied with the recorded area of survey no. 1009 as per survey records. The survey work is concluded on 11.6.2001.

The details of land showing physical features within survey no.1009 arrived after detailed survey are as under:-

Ac. Gts.

1. Land under the possession of Housing Board covered by built up area

288.00

2. Open land under possession of Housing Board

358.04

3. Land left for Graveyard/Burial ground by the Housing Board

15.00

661.04

4. Land under Manjeera Pipeline (Water works Dept.)

5.21

Total area of survey no. 1009

666.25

A sketch of survey no. 1009 showing the above details is prepared and submitted herewith.”

28. On 31st October, 2001 the learned Single Judge decided W.P. No. 7940 of 1999 and directed the Commissioner (Appeals) to hear the appeal and pass appropriate orders. In the meanwhile, status quo was directed to be maintained.

29. Pursuant to the directions given by the learned Single Judge, the Commissioner (Appeals) heard the appeal filed by APHB. By an order dated 4th January, 2003 the Commissioner (Appeals) upheld the view of the District Revenue Officer dated 9th June, 1998 and dismissed the appeal. The Commissioner (Appeals) was of opinion that

(i) Only 661.04 acres of land was acquired out of the larger area in Survey No.1009;

(ii) The claim made by the respondents that 11.10 acres out of Survey No.1009 was not acquired was not a belated claim;

(iii) The correction sought by the respondents in their claim under Section 87 of the Act was the correction of a clerical error under paragraph 5 (d) of the Circular dated 15th October, 1994. Proceedings before the learned Single Judge

30. Feeling aggrieved by the dismissal of its appeal by the Commissioner (Appeals), a writ petition was filed by APHB in the Andhra Pradesh High Court and that was numbered as W.P. No. 13927 of 2003.

31. A learned Single Judge of the High Court heard the writ petition and by a judgment and order dated 19th April, 2005 allowed it and quashed the order of the Commissioner (Appeals).

32. The learned Single Judge took the view that Section 87 of the Act was not applicable to the case and as such the claim made by the respondents was not maintainable. In addition, it was held that the claim made by the respondents does not fall within the category of a ‘clerical error’ and therefore the Circular dated 15th October, 1994 was also not applicable. The learned Single Judge made a reference to the failure of the State and the respondents to produce the record prepared at the time of survey which could have shown a wrong calculation of area. In this regard it was held by the learned Single Judge as follows: “Record prepared at the time of survey is not produced to show that there is a wrong calculation of area, though the measurement on ground and record support the correct area.

So, entry regarding extent of S.No.1009 cannot be said to have been made wrongly due to a clerical mistake. By arriving at the area of a particular survey number by conducting survey thereof only, several decades after settlement, and without surveying the areas in other survey numbers adjacent to that survey number, question of the original entry in the settlement register was a wrong entry as a clerical error or not cannot be determined. There is nothing on record to show that lands in adjacent survey numbers of S.No.1009 also were surveyed and as to what is the extent found in such survey, and the extent noted in the settlement register.”

33. With regard to the contention that only 661.04 acres had been acquired out of Survey No.1009, the learned Single Judge noted that a declaration had been filed by and on behalf of the respondents under the provisions of the Andhra Pradesh Land Reforms (Ceiling of Agricultural Holdings) Act, 1973. In that declaration there was nothing to suggest that the respondents were holding excess land which would have been so had the respondents been in possession of 11.10 acres. The learned Single Judge observed as follows:-

“The contention of Mir Fazeelath Hussain Khan and his heirs that since they are in actual physical possession of the land of Acs.11=10gts in S. No. 1009, even after acquisition by the petitioner, and so they can make a claim cannot be countenanced because by the time A.P. Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 (Act 1 of 1973) and the Urban Land (Ceilings and Regulation) Act, 1976, came into force Mir Fazeelath Hussain Khan, who originally filed the application before the 3rd respondent, was alive, and had filed a declaration under the Act 1 of 1973.

He showed the total area covered by S. Nos. 1009, 1043 to 1065 belonging to him as Acs.1109-92 gts. That extent was deleted from his holding as it was acquired and by the order dated 09-12-1976, vide common order in C.C.Nos.156 to 159/W/75 he was held to be holding 0.4083 standard holding in excess even after deleting of an extent of Acs.1109.92 gts in S. Nos. 1009, 1043 to 1065 of Kukatpally village. If Mir Fazeelath Hussain Khan really was in possession of or was owning any extent over and above the area acquired by the petitioner either in S. No. 1009 or 1043 to 1065, he would have had to surrender that area also, because even without that area being included in his holding he was found to be holding land in excess of the ceiling area.”

…………………………………….

“So, it is clear that the family of Raisyar Jung was said to be holding only land to the extent of Acs.349-63 cents in S.No.1007 but not any land in S. No. 1009. This extent of Acs.11-10 gts now said to be in the possession of unofficial respondents was not declared by them or their predecessors in the declaration under Act 1 of 1973. Fazeelath Hussain Khan, who filed the petition before the District Revenue Officer, or any of the unofficial respondents or their predecessors-in -title, been in possession of any extent land in S. No. 1009 by 01.01.1975 they would have shown it in their declaration filed under Act 1 of 1973. But they did not do so. For that reason also the contention of the unofficial respondents that they are in possession some land in S. No. 1009 and that the extent of S. No. 1009 is more than that was acquired by the petitioner cannot be believed or accepted.”

34. The learned Single Judge also dealt with the submission on behalf of the respondents that the APHB had no locus standi to question the order passed by the Commissioner (Appeals). It was noted that the APHB was a party to the proceedings before the Commissioner (Appeals) and therefore it was entitled to question the adverse order. Moreover, when the authorities assume jurisdiction which they do not possess under Section 87 of the Act and pass orders likely to affect the interests of the APHB, a right accrues to the APHB to question such orders passed without jurisdiction.

35. Since the learned Single Judge concluded that the orders passed by the District Revenue Officer and the Commissioner (Appeals) were without jurisdiction, there was obviously no occasion to decide the question whether the claim filed by the respondents was belated or not.

Proceedings before the Division Bench

36. Feeling aggrieved by the judgment and order passed by the learned Single Judge on 19th April, 2005, writ appeals being W.A. No. 1311 of 2005 and W.A. No. 1781 of 2005 were filed by the respondents challenging the order passed by the learned Single Judge. By the impugned judgment and order dated 25th September, 2009 the writ appeals were allowed by the Division Bench and it is under these circumstances that the present appeals are before us.

37. The High Court allowed the writ appeals primarily on two submissions. It was held by the Division Bench that a report of the survey authorities had confirmed that the area of land in Survey No. 1009 was more than 661.04 acres. Admittedly, only 661.04 acres had been acquired out of Survey No. 1009. Therefore, the APHB was entitled to hold only 661.04 acres while the balance had not been acquired and therefore the ownership remained with the respondents. According to the Division Bench, there was a clerical error in the measurement area of Survey No. 1009 and therefore paragraph 5(d) of the Circular dated 15th October, 1994 was applicable and the authorities were entitled to correct the calculation error.

38. The second ground given by the Division Bench was with reference to the provisions of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973. In this context, it was held that since the respondents were not holding the land, they could not have made a declaration as envisaged under the provisions of the said Act and in any event this was hardly of any relevance since Survey No. 1009 indicates that the area of that survey number was greater than 661.04 acres. However, what is of significance is the conclusion arrived at by the Division Bench that the respondents were not in possession of 11.10 acres in Survey No. 1009. Possession of the entire Survey No. 1009 was with the APHB.

Discussion

39. In our opinion, the Division Bench of the High Court has seriously erred in setting aside the order of the learned Single Judge.

40. It is quite clear to us that the APHB had acquired, in terms of the Award dated 10th June, 1968 a couple of thousand acres of land covering a few dozen survey numbers. The entire land was acquired and in view of the large area of acquisition even if there was some error in describing the area of a particular survey number, that would be inconsequential given the overall acquisition and its purpose for a Housing Scheme under Section 22A of the Andhra Pradesh Housing Board Act.

41. In addition, it is quite clear from the extracted passages in the Award, that the entire land in Survey No.1009 was acquired by the APHB. There cannot be any doubt in this regard, particularly since the APHB also took possession of the entire Survey No.1009.

42. While it is correct that the respondents did submit in their claim petition under Section 18 of the Land Acquisition Act, 1894 that 11 acres and odd had not been acquired, there was absolutely no reference to any survey number in which this 11 acres and odd was located. There was no clear identification of the land, no boundaries were mentioned nor was the land ear-marked in any manner and in fact even the exact measurement was not mentioned. It appears to us that the respondents were taking a potshot in the dark to somehow or the other retain possession of some of the acquired land.

43. If the respondents were convinced that 11 acres and odd had not been acquired by the APHB in 1968 it is not understandable why no follow up action taken by them. They had an option, perhaps, of proceeding against the APHB for being in wrongful possession of 11 acres and odd owned by the respondents and they certainly had the option of moving an application under Section 87 of the Act. The respondents took neither of these steps on an urgent basis or any other step that might have been available to them in law.

44. All that the respondents did was to wait for another 25 years and then move an application under Section 87 of the Act sometime in 1993. There was no change in the factual situation between 1968 and 1993 except construction having been made by the APHB in pursuance of its Housing Scheme. The respondents have given absolutely no explanation for filing an application under Section 87 of the Act after such an enormous lapse of time. What has been submitted is that there is no time limit for correcting a clerical error and that being so, the respondents cannot be non-suited on the ground of delay and laches.

45. We are not in agreement with the respondents on any aspect of the case. First of all we agree with the APHB that an accurate picture of the area in terms of measurement of land in Survey No.1009 cannot be fully relied upon after several decades and after construction having been made. The records had originally indicated that Survey No.1009 consists of 666.25 acres and we must proceed on that basis rather than assume the correctness of a measurement carried out after several decades.

46. That the unexplained delay in measurement of the area cannot be relied upon is also supported by the fact that even the revenue authorities were not quite sure about the exact area of Survey No.1009. According to the respondents, 11.10 acres had not been acquired but according to the revenue authorities the entire area of Survey No.1009 was actually 687.03 acres with the result that 20.18 had not been acquired. In view of this discrepancy, we are of opinion that surveys conducted post the notification under Section 4 of the Land Acquisition Act cannot be relied upon. We have also noted that it has come on record that IDL was also in possession of some parts of Survey No.1009.

We must, therefore, accept the fact that the entire Survey No.1009 was acquired by the APHB and possession taken, regardless of its actual measurement and the alleged non-acquisition of 11.10 acres is nothing but a red herring. Consequently, the question of correcting a ‘clerical error’ with reference to Section 87 of the Act does not arise.

A clerical error

47. In any event, it was contended by the respondents that a clerical error was sought to be corrected in the measurement of the area of Survey No.1009. It is not clear what the clerical error was. If the clerical error was that the area of Survey No.1009 was not 661.04 acres or 666.25 acres but actually 687.03 acres then the contention is self-defeating. This is because the area of Survey No.1009 would then have to be read as 687.03 for all purposes and not 661.04 acres. The consequence of this correction would be that the acquisition was of 687.03 acres and not of 661.04 acres.

48. That apart, the correction of the alleged clerical error does not give rise to the argument that only 661.04 acres was acquired out of 687.03 acres. If the correction gives rise to an argument or contention, then it ceases to be the correction of a clerical error but is really the correction of a substantive error, which does not come within the purview of Section 87 of the Act.

49. Be that as it may, in M/s Tata Consulting Engineers v. Workmen1 Pathak, J. adverted to a clerical error and held in paragraph 20 of the Report as follows: “The jurisdiction given to the [Industrial] Tribunal by Rule 31 [Industrial Disputes (Bombay) Rules, 1957] is closely circumscribed. It is only a clerical mistake or error which can be corrected, and the clerical mistake or error must arise from an accidental slip or omission in the award. An accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted. It must be a mistake or error amenable to clerical correction only. It must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved.”

50. Similarly, a clerical error was discussed in Sooraj Devi v. Pyare Lal.2 In paragraph 4 of the Report, reference was made to Master Construction Co. (P) Ltd. v. State of Orissa3 and it was held as follows: “A clerical or arithmetical error is an error occasioned by an accidental slip or omission of the court. It represents that which the court never intended to say. It is an error apparent on the face of the record and does not depend for its discovery on argument or disputation. An arithmetical error is a mistake of calculation, and a clerical error is a mistake in writing or typing.”

51. More recently, in Vipinchandra Vadilal Bavishi (Dead) by Lrs. v. State of Gujarat 4 it was held in paragraph 26 of the Report as follows: “An arithmetical mistake is a mistake in calculation, while a clerical mistake is a mistake of writing or typing error occurring due to accidental slip or omissions or error due to careless mistake or omission. In our considered opinion, substituting different lands in place of the lands which have been notified by a statutory notification under Sections 10(1), 10(3) and 10(5) [Urban Land (Ceiling and Regulation) Act, 1976] cannot and shall not be done by issuing a corrigendum unless the mandatory requirements contained in the aforementioned sections is complied with. A landholder cannot be divested from his land on the plea of clerical or arithmetical mistake liable to be corrected by issuing corrigendum.”

52. The Circular dated 15th October, 1994 clarifies a clerical error. Some examples have been given and one clarification is to the effect that a clerical error is where the area is calculated wrongly though measurement on the ground and the records support the correct area. This clause is sought to be relied upon by the respondents. It must be appreciated in this case that there is no question of a calculation error since no arithmetical error was committed as understood by this Court. The area of Survey No.1009 was measured and it was found to be 666.25 acres (including the area acquired for Manjeera Water Works Department).

The survey by the Measuring Circle Inspector, the check by the G.D. Inspector and approved by the Land Record Assistant clearly indicate this. This was sought to be ‘corrected’ by the respondents by claiming that the area of Survey No.1009 was much more. A calculation error would be, in a situation such as the present, an error that would appear on the face of the document or the revenue records, as the case may be. If there is a need to carry out a survey and a re-survey, the error cannot by any means, be described as a clerical error.

53. What makes the situation worse insofar as the respondents are concerned is that according to them the error was to the extent of 11.10 acres but on a survey having been conducted, the error was said to be to an extent of 20.18 acres. Surely, such a discrepancy cannot be described as an accidental slip or a clerical mistake or a calculation error. It can only be described as a major error which ought to have been rectified at the appropriate time in 1968 when the Award was passed or soon thereafter. To notice and make much ado about such an error after at least 25 years cannot be understood as the correction of a clerical error.

54. Learned counsel for the respondents referred to K.P. Varghese v. Income Tax Officer, Ernakulum and Another5 to contend that the Circular dated 15th October, 1994 is a contemporaneous exposition of the true state of affairs as understood by the revenue authorities themselves and if they believed that a ‘clerical error’ ought to be interpreted in the manner described in the Circular, that interpretation must be accepted. The following passage was referred to and relied upon:

“The rule of construction by reference to contemporanea expositio is a well-established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. This rule has been succinctly and felicitously expressed in Crawford on Statutory Construction, (1940 Edn.) where it is stated in para 219 that “administrative construction (i.e. contemporaneous construction placed by administrative or executive officers charged with executing a statute) generally should be clearly wrong before it is overturned; such a construction, commonly referred to as practical construction, although non-controlling, is nevertheless entitled to considerable weight; it is highly persuasive””.

55. Similarly, reference was also made to Desh Bandhu Gupta and Co. v. Delhi Stock Exchange Association Ltd.6The following passage was relied upon by learned counsel for the respondents. “The principle of contemporanea expositio (interpreting a statute or any other document by reference to the exposition it has received from contemporary authority) can be invoked though the same will not always be decisive of the question of construction (Maxwell 12th ed. p. 268).”

56. It is no doubt true that the contemporaneous exposition of a document must carry great weight but if that exposition is not in consonance with the law laid down by the Courts, including this Court, the exposition would not be relevant. We have made a reference to several decisions which explain the meaning of a clerical error.The view expressed in the Circular dated 15th October, 1994 particularly clause 5(d) referred to and relied upon by the respondents does not come within the four corners of the understanding of the expression clerical error by this Court if it involves a survey and a re-survey as in this case. Therefore, no reliance can be placed upon the contemporaneous exposition made by the revenue authorities in the Circular dated 15th October, 1994.

57. We conclude that there was no clerical error in the measurement of Survey No.1009 for all intents and purposes and that in any event, the entire land in Survey No.1009 was acquired for the Housing Scheme of the APHB.

Section 87 of the Act and delay in making a claim

58. We are also not satisfied with the delay by the respondents in making a claim under Section 87 of the Act. The contention of the respondents is that since there is no time limit specified for filing a claim petition, they could have made a claim at any point of time, particularly for correcting a clerical error.

59. It is now well settled that where no time-limit is specified, whatever is required to be done should be within a reasonable period. In Collector v. P. Mangamma7it was held in paragraphs 5 and 6 as follows: “A reasonable period would depend upon the factual circumstances of the case concerned. There cannot be any empirical formula to determine that question. The court/authority considering the question whether the period is reasonable or not has to take into account the surrounding circumstances and relevant factors to decide that question.

In State of Gujarat v. Patel Raghav Natha8 it was observed that when even no period of limitation was prescribed, the power is to be exercised within a reasonable time and the limit of the reasonable time must be determined by the facts of the case and the nature of the order which was sought to be varied………”. Reasonable, being a relative term is essentially what is rational according to the dictates of reason and not excessive or immoderate on the facts and circumstances of the particular case.”

60. Similarly, in Joint Collector Ranga Reddy District v. D. Narsing Rao9 the exercise of revisional jurisdiction where no time-limit is specified was considered and it was held in paragraph 31 of the Report as follows:

“To sum up, delayed exercise of revisional jurisdiction is frowned upon because if actions or transactions were to remain forever open to challenge, it will mean avoidable and endless uncertainty in human affairs, which is not the policy of law. Because, even when there is no period of limitation prescribed for exercise of such powers, the intervening delay, may have led to creation of third-party rights, that cannot be trampled by a belated exercise of a discretionary power especially when no cogent explanation for the delay is in sight. Rule of law it is said must run closely with the rule of life. Even in cases where the orders sought to be revised are fraudulent, the exercise of power must be within a reasonable period of the discovery of fraud. Simply describing an act or transaction to be fraudulent will not extend the time for its correction to infinity; for otherwise the exercise of revisional power would itself be tantamount to a fraud upon the statute that vests such power in an authority.”

61. Finally in Basanti Prasad v. Chairman, Bihar School Examination Board10 it was pointed out where third party rights are likely to be affected, the courts decline to interfere but if there is a necessity to interfere then the aggrieved person should be heard on merits.

62. Insofar as the facts of the present case are concerned, the claim made under Section 87 of the Act was after a period of at least 25 years. This can hardly be described as a reasonable period. There is no explanation for the inordinate delay and to make matters worse, third party interests have been created through a Housing Scheme developed on the land in dispute or in any event on the surrounding land. After a further lapse of 25 years it is not possible to put the clock back, even if there is any reason to do so, which reason we cannot even visualise in this case.

Locus standi

63. It was submitted by learned counsel for the respondents that the APHB has no locus standi to raise any dispute with regard to the measurement of Survey No.1009. We are not at all in agreement with this submission. A tract of land measuring 11.10 acres out of Survey No.1009 was sought to be taken away from the APHB which had announced a Housing Scheme under Section 22A of the Andhra Pradesh Housing Board Act, 1956 and third party rights had also been created in this regard. The primary responsibility of protecting the interests of the beneficiaries of the Housing Scheme was that of the APHB and surely it cannot be said under these circumstances that the APHB had no locus standi to participate in the proceedings. In fact, even the revenue authorities recognised the locus of the APHB in the order dated 15th September, 1997.

The Commissioner of Survey, Settlements and Land Records, Hyderabad directed the District Revenue Officer to take action in terms of the Circular of 15th October, 1994 but before passing any orders under Section 87 of the Act, it was directed that the APHB should be heard. We therefore reject the contention that the APHB had no locus standi in the matter.

Interference on facts

64. The final submission of learned counsel for the respondents was that the revenue authorities had come a factual conclusion in their favour and the High Court ought not to have interfered with the factual conclusions and even this Court ought not to interfere with the factual conclusions arrived at by the revenue authorities. In our opinion, the revenue authorities had completely misdirected in law in reopening a factual issue that had been settled way back in 1968 if not earlier and there was no occasion for reopening that factual issue after a lapse of at least 25 years. That being the position, it cannot be said that the courts are precluded from interfering in a matter of determination of facts when the authorities have completely misdirected themselves in law and exercised jurisdiction which did not vest in them. We therefore also reject this submission of the respondents.

Conclusion

65. To conclude, therefore, we hold that the entire Survey No. 1009 was acquired by the APHB for a Housing Scheme. No parcel of land in Survey No.1009 was left out or not acquired. Compensation was paid for acquisition of the entire Survey No.1009. The Division Bench of the High Court erred in concluding that 20.18 acres of land in Survey No.1009 had not been acquired.

66. We also hold that it is too simplistic on the part of the respondents to contend that land in excess of 661.04 acres in Survey No.1009 was not acquired. This is certainly not so and the entire Survey No.1009 was acquired. The submission in this regard is rejected.

67. We also hold that the claim made by the respondents under Section 87 of the Act was hopelessly delayed for which there is absolutely no explanation forthcoming. In addition, we hold that since third party rights have been created in the meanwhile under the Housing Scheme of the APHB and there is no way to put the clock back. The respondents ought to have been vigilant in pursuing their claim, assuming the claim was legitimate, but since they were not vigilant enough, they must suffer the consequences of their inaction.

68. We also hold that the proceedings under the Andhra Pradesh Land Reforms (Ceiling of Agricultural Holdings) Act, 1973 were of some consequence but since the APHB has not relied upon the proceedings under the said Act and learned counsel has only mentioned it in passing, we do not intend to base our decision on the declaration made by the respondents under the said Act.

69. We also hold that the APHB was directly and primarily affected by the claim made by the respondents under Section 87 of the Act and therefore had the locus standi to proceed before the Commissioner (Appeals), the High Court and this Court.

70. In view of the above conclusions, the judgment and order passed by the Division Bench is set aside and the appeals filed by the Telangana Housing Board are allowed.

[Civil Appeal Nos. 873-874 of 2018 arising out of SLP(C) Nos.30923-30924 of 2016]

R. BANUMATHI, J.

1. Leave granted

2. These appeals arise out of the judgment of the High Court of Punjab and Haryana at Chandigarh in and by which the High Court enhanced the compensation to Rs.2,19,413/- per acre and also dismissed the review holding that the subsequent evidence sought to be brought is not relevant as it is based upon post notification.

3. Respondent No.2-Haryana State Ware Housing Corporation had acquired 40 kanal and 8 marlas land at Rania for construction of warehouse/godown vide Notification dated 12.02.1988 issued under Section 4(1) of the Land Acquisition Act, 1894 (for short ‘the Act’); out of which 40 kanal 8 marlas land, 21 kanal 6 marlas land was of the present appellants;

Notification dated 21.02.1989 was issued under Section 6 of the Act. Vide award No.9 dated 19.05.1990, the Land Acquisition Officer awarded compensation of Rs.75,000/- per acre. Being aggrieved by the award dated 19.05.1990, the appellants/claimants filed a reference petition under Section 18 of the Act before Additional District Judge, Sirsa for enhancement of compensation, which came to be dismissed by judgment dated 15.02.1993. Being aggrieved by the dismissal of the claim for enhancement, the appellants/claimants filed appeal before the High Court in R.F.A.No.1519 of 1993.

The High Court relied upon the sale deed dated 26.05.1983 wherein small extent of land of 9 marlas was sold for Rs.25,500/- as an exemplar. The High Court gave escalation at 10% for the time gap of 56 months and calculated the value at Rs.6,64,887/- per acre and made the deduction at the rate of 67.5% for development charges and calculated the compensation to be awarded at Rs.2,19,413/- per acre.

4. Being aggrieved, the land owners filed Special Leave Petition(C) No.27989 of 2013 before this Court which was withdrawn by order dated 01.08.2014 with liberty to file review before the High Page No. 2 of 10 Court. In the review petition, the appellants/claimants relied upon:-

(i) sale deed dated 27.12.1988; and

(ii) subsequent acquisition of nearby land vide notification dated 27.03.1989 in which the High Court by its judgment dated 15.09.2006 in R.F.A. No.866 of 1996 awarded compensation of Rs.7,26,000/- per acre.

The High Court dismissed the review, inter alia, holding that the sale deed dated 27.12.1988 is a post notification sale and also the acquisition vide notification dated 27.03.1989 was subsequent one and the same is not relevant for determining the market value of the lands acquired vide notification dated 12.02.1988. Moreover, the High Court found no valid ground for review under Order XLVII C.P.C. Being aggrieved, the appellants/land owners have filed these appeals.

5. Contention of the appellants/claimants are mainly three-fold:-

(i) there was only ten months difference between the notification dated 12.02.1988 and the sale deed dated 27.12.1988 while so, the High Court was not justified in not considering the said sale deed dated 27.12.1988 as an exemplar on the ground that the same is a post notification;

(ii) considering that the land acquired falls within municipal limits and had immense potential for use for commercial and residential purpose, applying the maximum cut at the rate of 67.5% was not justified; and

(iii) for acquisition of the land of the adjoining khasra by notification dated 27.03.1989, compensation was awarded at the rate of Rs.7,26,000/- per acre by the High Court which is more than three times higher than the compensation awarded in the present case.

6. So far as the first contention is concerned, the sale deed relied upon by the appellants/claimants dated 27.12.1988 is post notification. Sub-section (1) of Section 23 of the Act provides that the compensation to be awarded shall be determined by the reference court, based upon the market value of the acquired land at the date of the publication of the notification under Section 4(1). In Kolkata Metropolitan Development Authority v. Gobinda Chandra Makal and Anr. (2011) 9 SCC 207, it was held that the relevant date for determining the compensation is the date of publication of the notification under Section 4(1) of the Act in the Gazette. In para (34), it was held as under:-

“34. One of the principles in regard to determination of the market value under Section 23(1) is that the rise in market value after the publication of the notification under Section 4(1) of the Act should not be taken into account for the purpose of determination of market value. If the deeming definition of “publication of the notification” in the amended Section 4(1) is imported as the meaning of the said words in the first clause of Section 23(1), it will lead to anomalous results.

The owners of the lands which are the subject-matter of the notification and neighbouring lands will come to know about the proposed acquisition, on the date of publication in the Gazette or in the newspapers. If the giving of public notice of the substance of the notification is delayed by two or three months, there may be several sale transactions in regard to nearby lands in that period, showing a spurt or hike in value in view of the development contemplated on account of the acquisition itself.” Applying the ratio of the above decision, we are of the view that the post notification instances cannot be taken into consideration for determining the compensation of the acquired land.

7. So far as the contention regarding deduction at the rate of 67.5% for development charges is concerned, the exemplar relied upon by the High Court dated 26.05.1983 was for a small extent of land of 9 marlas which was sold for Rs.25,500/-. The transaction relates to the period which is about 56 months prior to the notification under Section 4 of the Act and the High Court adopted the rate of escalation at 10% and calculated the value at Rs.6,64,887/-. Considering the fact that the acquired land required for development and that the property covered under the exemplar was for a small extent of 9 marlas of land, the High Court applied maximum deduction at 67.5% and calculated the compensation to be paid at Rs.2,19,413/- per acre.

8. In Haryana State Agricultural Market Board and Anr. v. Krishan Kumar and Ors. (2011) 15 SCC 297, this Court has held that “if the value of small developed plots should be the basis, appropriate deductions will have to be made therefrom towards the area to be used for roads, drains, and common facilities like park, open space, etc. Thereafter, further deduction will have to be made towards the cost of development, that is, the cost of leveling the land, cost of laying roads and drains, and the cost of drawing electrical, water and sewer lines.”

9. Observing that the development charges for development of particular plot of land could range from 20% to 75%, in Lal Chand v. Union of India and Another (2009) 15 SCC 769, in paras (13), (14) and (20), this Court held as under:

“13. The percentage of ‘deduction for development’ to be made to arrive at the market value of large tracts of undeveloped agricultural land (with potential for development), with reference to the sale price of small developed plots, varies between 20% to 75% of the price of such developed plots, the percentage depending upon the nature of development of the layout in which the exemplar plots are situated.

14. The ‘deduction for development’ consists of two components. The first is with reference to the area required to be utilised for developmental works and the second is the cost of the development works. ……… 20. Therefore the deduction for the ‘development factor’ to be made with reference to the price of a small plot in a developed layout, to arrive at the cost of undeveloped land, will be for more than the deduction with reference to the price of a small plot in an unauthorised private layout or an industrial layout. It is also well known that the development cost incurred by statutory agencies is much higher than the cost incurred by private developers, having regard to higher overheads and expenditure.” The same principle was reiterated in Andhra Pradesh Housing Board v. K. Manohar Reddy and Ors. (2010) 12 SCC 707.

10. In a catena of judgments, this Court has taken the view to apply one-third deduction towards the development charges. After referring to various case laws on the question of deduction for development, in Major General Kapil Mehra and Ors. v. Union of India and Anr. (2015) 2 SCC 262, this Court held as under:

“19. In fixing the market value of the acquired land, which is undeveloped or underdeveloped, the courts have generally approved deduction of 1/3rd of the market value towards development cost except when no development is required to be made for implementation of the public purpose for which land is acquired. In Kasturi v. State of Haryana (2003) 1 SCC 354 the Court held: (SCC pp. 359-60, para 7) ‘7. …

It is well settled that in respect of agricultural land or undeveloped land which has potential value for housing or commercial purposes, normally 1/3rd amount of compensation has to be deducted out of the amount of compensation payable on the acquired land subject to certain variations depending on its nature, location, extent of expenditure involved for development and the area required for road and other civic amenities to develop the land so as to make the plots for residential or commercial purposes.

A land may be plain or uneven, the soil of the land may be soft or hard bearing on the foundation for the purpose of making construction; maybe the land is situated in the midst of a developed area all around but that land may have a hillock or may be low-lying or may be having deep ditches. So the amount of expenses that may be incurredin developing the area also varies…………………There may be various factual factors which may have to be taken into consideration while applying the cut in payment of compensation towards developmental charges, maybe in some cases it is more than 1/3rd and in some cases less than 1/3rd.

It must be remembered that there is difference between a developed area and an area having potential value, which is yet to be developed. The fact that an area is developed or adjacent to a developed area will not ipso facto make every land situated in the area also developed to be valued as a building site or plot, particularly when vast tracts are acquired, as in this case, for development purpose.’ The rule of 1/3rd deduction was reiterated in Tejumal Bhojwani v. State of U.P. (2003) 10 SCC 525, V. Hanumantha Reddy v. Land Acquisition Officer (2003) 12 SCC 642, H.P. Housing Board v. Bharat S. Negi (2004) 2 SCC 184 and Kiran Tandon v. Allahabad Development Authority (2004) 10 SCC 745.

38. In few other cases, deduction of more than 50% was upheld. In the facts and circumstances of the case in Basavva v. Land Acquisition Officer (1996) 9 SCC 640, this Court upheld the deduction of 65%. In Kanta Devi v. State of Haryana (2008) 15 SCC 201, deduction of 60% towards development charges was held to be legal. This Court in Subh Ram v. State of Haryana (2010) 1 SCC 444, held that deduction of 67% amount was not improper. Similarly, in Chandrashekar v. Land Acquisition Officer (2012) 1 SCC 390, deduction of 70% was upheld.”

11. In Subh Ram and Others v. State of Haryana and Anr. (2010) 1 SCC 444, the deduction of 67% was held to be not improper. In the case in hand, the High Court applied deduction at 67.5% which in our considered view is on the higher side. In the facts and circumstances of the present case and considering that the exemplar dated 26.05.1983 was for a small extent of land and that the acquired land has to be developed for construction of warehouse, we deem it appropriate to apply one-third deduction and deducting one-third that is Rs.2,21,629/- from Rs.6,64,887/-, the compensation to be awarded is arrived at Rs.4,43,258/- per acre.

12. The impugned judgment is modified and the appellants/claimants are entitled to get enhanced compensation of Rs.4,43,258/- payable with all statutory benefits. The appeals are partly allowed. It is made clear that the appellants/claimants shall not be entitled to claim interest for the period of delay in preferring the appeals from the review.

If any private land is shown as reserved in the Development plan , the same can be acquired within 10 years either by agreement or by following the procedure prescribed under the 1894 Act and if proceedings for the acquisition of the land are not commenced within that period and a further period of six months from the date of service of notice under Section 127 of the 1966 Act, reservation will be deemed to have lapsed and the land will be available for development by the owner.

ACTS: Maharashtra Regional and Town Planning Act, 1966 AND Land Acquisition Act, 1894 AND Sections 126 and 127 of the MRTP Act

2. Respondent No.1 is the owner of the land measuring 5300 sq. mtrs. comprised in Survey No.72, Penkarpada, Mira Road, within the municipal limits of Mira Bhayandar Municipal Corporation (hereinafter referred to as, ‘the Corporation’). In the Development plan prepared under the Maharashtra Regional and Town Planning Act, 1966 (for short, ‘the 1966 Act’), which was sanctioned on 14.5.1997 and was enforced on 15.7.1997, a portion of the land belonging to respondent No.1 (2500 sq. mtrs.) was shown as reserved for extension of Royal College of Arts, Science and Commerce run by the Royal Society of Bombay (for short, ‘the Society’).

3. In December, 2005 the Corporation made an application to the District Collector for initiation of the acquisition proceedings. The latter asked the Corporation to submit detailed proposal for facilitating the acquisition. Thereupon, the Competent Authority prepared a detailed plan, which was submitted to the Collector on 26.7.2006.

4. In the meanwhile, the Society filed Writ Petition No.4341/2005 for issue of a direction to the State Government and the Corporation to expedite the acquisition proceedings. The Division Bench of the High Court disposed of the writ petition vide order dated 16.2.2006, the relevant portion of which is extracted below: “From the affidavit filed by Sanjay Adhav, Special Land Acquisition Officer, the Learned G.P. points out that the Municipal Corporation has already forwarded the necessary documents to the Collector in the prescribed form. Considering that, the Special Land Acquisition Officer to pass an award within six months. It is further made clear that on the Special Land Acquisition Officer calling on the petitioners to deposit the compensation as computed by him, the same would be deposited by the petitioners within four weeks of such demand. It is only thereupon that the Special Land Acquisition Officer to proceed to pass an award and, thereafter, to take steps to hand over possession within one month after the award is passed. Rule made absolute accordingly.”

5. Since the Special Land Acquisition Officer did not take steps in furtherance of the directions contained in the aforesaid order, respondent No.1 issued purchase notice dated 25.7.2007 under Section 127 of the 1966 Act, which was duly served upon the Corporation. After one year, respondent No.1 submitted plan dated 28.7.2008 for construction of a library building on the land owned by it. The same was rejected by the Competent Authority vide order dated 29.9.2008 on the ground that the land was reserved for the college and the acquisition proceedings had already been initiated.

6. Respondent No.1 challenged the rejection of its plan in Writ Petition No.36/2009. The pleaded case of respondent No.1 was that reservation of the land had lapsed and the reason assigned by the Competent Authority for rejecting the building plan was legally untenable. In paragraphs 11 to 16 and 21 to 26 of the writ petition, respondent No.1 made the following averments:

“11. By their letter dated 28th April, 2006, the petitioners forwarded a copy of the aforesaid order of this Hon’ble Court dated 16th February, 2006 to the respondent No.1 and inter alia, requested it to demarcate the land area admeasuring 0.25 hectors to enable the petitioners to comply with the aforesaid order of this Hon’ble Court. Hereto annexed and marked Exhibit C is a copy of the said letter dated 26th April, 2006.

12. The petitioners by their further letter dated 6th May, 2006 inter alia, requested the respondent No.1 to expedite the process of demarcation and intimate in writing to enable the petitioners to comply with the aforesaid orders of this Hon’ble Court within the stipulated time. Hereto annexed and marked as Exhibit D is the copy of the said letter dated 6th May, 2006.

13. By the letter dated May 31, 2006, the Advocates for the petitioners, after setting out the relevant fact inter alia requested the respondent No.2, to intimate the petitioners at the earliest the land demarcated and/or reserved for extension of Royal College failing which the petitioners will not be in a position to comply with the aforesaid order of this Hon’ble Court. Hereto annexed and marked as Exhibit E is a copy of the said letter dated May 31, 2006.

14. The Advocates for the said Royal Society of Bombay, by their letter dated 27th Jun3, 2006, inter alia called upon the petitioners to remove the illegal structures purported to be standing on the said land. Hereto annexed and marked as Exhibit F is a copy of the said letter dated 27th June, 2006.

15. The advocates for the petitioners by their letter dated June 29, 2006 replied to the aforesaid letter dated 27th June, 2006 of the Advocates for the said Royal Society. By the said letter, the advocates for the petitioners, after setting out the relevant fact, inter alia informed the Advocates for the said Royal Society, that in the absence of demarcation of land to be allotted to the said Royal Society by the respondent No.1, the petitioners are not in a position to comply with the aforesaid order of this Hon’ble Court. Hereto annexed and marked as Exhibit G is the copy of the said letter dated June 29, 2006.

16. By a letter dated 26th June, 2006 the respondent No.1 after setting out some of the facts, inter alia, requested the Collector of Thane, Thane to transfer the said property inferred to therein to the municipal Corporation as early as possible. Hereto annexed and marked Exhibit H is a copy of the said letter dated 28th June, 2008 in English translation along with its original Marathi copy.

21. It can be seen from the facts of the case that the Special Land Acquisition Officer did not comply with the order of this Hon’ble Court of making the award within six months.

22. In the circumstances aforesaid, the petitioners aforesaid a purchase notice dated 25th July, 2007 under Section 127 of the Maharashtra Regional and Town Planning Act to the respondent No.1 requiring the respondent No.1 to take steps for acquisition within six months from the receipt of the said purchase notice, in accordance with the Act failing which allow the petitioners to develop the said land for the permissible user. This said purchase notice was received by the respondent No.1 on the same day. Hereto annexed and marked as Exhibit J is a copy of the said purchase notice dated 25th July, 2007.

23. By a letter dated 18tn August, 2007, the respondent No.1 informed the petitioners that on 26th July, 2006, the respondent No.1 has submitted a proposal for land acquisition in respect of the petitioners land and hence rejected the petitioners said purchase notice. Hereto annexed and marked as Exhibit K is a copy of the said letter dated 18th August, 2007 in English translation along with its original Marathi copy together with said copy of the said letter dated 26th July, 2006 in English translation and original Marathi copy. No steps are taken to purchase the said portion of land within 6 months in terms of the notice dated 25th July, 2007.

24. The petitioners by their Architects letter dated 28tn July, 2006, submitted to the respondent No.2 on 2nd August, 2008 inter alia submitted four sets of proposed plan of the property bearing Survey NO.237 p. of village Penkarpada, District Thane along with necessary documents for the proposed Library Building and requested the respondent No.2 to approve the plan at the earliest. Hereto annexed and marked as Exhibit L is a copy of the said letter dated 28th July, 2008.

25. On behalf of the respondent No.1, the respondent No.3 by the communication dated 29th September, 2008 inter alia rejected the application of the petitioners for development of the said plot of land on the ground that part of the said plot of the land is for extension of college and is reserved for Royal College and in the absence of NOC from the said Royal College, it is bound by the said reservation of the said plot of land for extension of college and it is not possible to permit the development. Hereto annexed and marked as Exhibit M is a copy of the said communication dated 29th September, 2008 in English translation along with its original Marathi copy.

26. It is submitted that the action of the respondents in not sanctioning and granting the petitioners’ proposal submitted to the respondent No.2 vide their Architects letter dated 28th July, 2008, for construction of library building on the property bearing Survey No.237 p. of village – Pankarpada, District Thane, Mira Road, Thane and the communication dated 29th September, 2008 (hereinafter referred to as “the impugned communication”) issued by respondent No.3 rejecting the petitioners proposal is illegal and otherwise untenable and unsustainable in law on the following amongst other grounds, which are taken without prejudice to one another.”

7. In the counter affidavits filed by respondent Nos. 6, 8-10, 12, 13, 15 and 16, it was pleaded that reservation of the land belonging to respondent No.1 cannot be treated to have lapsed because the acquisition proceedings had already commenced and in terms of the direction given by the High Court in Writ Petition No.4341/2005, the Special Land Acquisition Officer was required to pass an award within the stipulated period. However, they did not dispute the averments contained in various paragraphs of the writ petition, which have been extracted hereinabove.

8. The Division Bench of the High Court relied upon the judgments of this Court in Girnar Traders v. State of Maharashtra (2007) 7 SCC 555 and Prakash R.Gupta v. Lonavala Municipal Council and others (2009) 1 SCC 514 and ruled that reservation of the land belonging to respondent No.1 will be deemed to have lapsed because the same was neither acquired nor steps were taken for that purpose within six months of the receipt of purchase notice.

9. We have heard learned counsel for the parties and perused the record. Section 126 of the 1966 Act, which provides for the acquisition of land required or reserved for any of the public purposes specified in any plan or scheme prepared under the Act and Section 127 of the 1966 Act, which envisages lapsing of reservation in certain contingencies read as under:

“Section 126. Acquisition of land required for public purposes specified in plans. –

(1) When after the publication of a draft Regional Plan, a Development or any other plan or town planning scheme, any land is required or reserved for any of the public purposes specified in any plan or scheme under this Act at any time the Planning Authority, Development Authority, or as the case may be, any Appropriate Authority may, except as otherwise provided in section 113A acquire the land,-

(a) by an agreement by paying an amount agreed to, or

(b) in lieu of any such amount, by granting the land-owner or the lessee, subject, however, to the lessee paying the lessor or depositing with the Planning Authority, Development Authority or Appropriate Authority, as the case may be, for payment to the lessor, an amount equivalent to the value of the lessor’s interest to be determined by any of the said Authorities concerned on the basis of the principles laid down in the Land Acquisition Act, 1894, Floor Space Index (FSI) or Transferable Development Rights (TDR) against the area of land surrendered free of cost and free from all encumbrances, and also further additional Floor Space Index or Transferable Development Rights against the development or construction of the amenity on the surrendered land at his cost, as the Final Development Control Regulations prepared in this behalf provide, or

(c) by making an application to the State Government for acquiring such land under the Land Acquisition Act, 1894 and the land (together with the amenity, if any, so developed or constructed) so acquired by agreement or by grant of Floor Space Index or additional Floor Space Index or Transferable Development Rights under this section or under the Land Acquisition Act, 1894, as the case may be, shall vest in the Planning Authority. Development Authority, or as the case may be, any Appropriate Authority.

(2) On receipt of such application, if the State Government is satisfied that the land specified in the application is needed for the public purpose therein specified, or if the State Government (except in cases falling under section 49 and except as provided in section 113A) itself is of opinion that any land in any such plan is needed for any public purpose, it may make a declaration to that effect in the Official Gazette, in the manner provided in section 6 of the Land Acquisition Act, 1894 (1 of 1894), in respect of the said land. The declaration so published shall, notwithstanding anything contained in the said Act, be deemed to be a declaration duly made under the said section: Provided that, subject to the provisions of sub-section (4), no such declaration shall be made after the expiry of one year from the date of publication of the draft Regional Plan, Development Plan or any other Plan, or Scheme, as the case may be.

(3) On publication of a declaration under the said section 6, the Collector shall proceed to take order for the acquisition of the land under the said Act; and the provisions of that Act shall apply to the acquisition of the said land, with the modification that the market value of the land shall be,-

(i) where the land is to be acquired for the purposes of a new town, the market value prevailing on the date of publication of the notification constituting or declaring the Development Authority for such town;

(ii) where the land is acquired for the purposes of a Special Planning Authority, the market value prevailing on the date of publication of the notification of the area as an undeveloped area; and

(iii) in any other case the market value on the date of publication of the interim development plan, the draft development plan, or the plan for area or areas for comprehensive development, whichever is earlier, or as the case may be, the date or publication of the draft town planning scheme: Provided that, nothing in this sub-section shall affect the date for the purposes of determining the market value of land in respect of which proceedings for acquisition commenced before the commencement of the Maharashtra Regional and Town Planning (Second Amendment) Act, 1972 (Mah. XI of 1973):

Provided further that, for the purpose of clause (ii) of this sub- section, the market value in respect of land included in any undeveloped area notified under subsection (1) of section 40 prior to the commencement of the Maharashtra Regional and Town Planning (Second Amendment) Act, 1972 (Mah. XI of 1973), shall be the market value prevailing on the date of such commencement.

(4) Notwithstanding anything contained in the proviso to sub-section (2) and in subsection (3), if a declaration is not made within the period referred to in subsection (2) or having been made, the aforesaid period expired at the commencement of the Maharashtra Regional Town Planning (Amendment) Act, 1993, the State Government may make a fresh declaration for acquiring the land under the Land Acquisition Act, 1894 (I of 1894), in the manner provided by sub- sections (2) and (3) of this section, subject to the modification that the market value of the land shall be the market value at the date of declaration in the Official Gazette made for acquiring the land afresh.

Section 127. Lapsing of reservation – If any land reserved, allotted or designated for any purpose specified in any plan under this Act is not acquired by agreement within ten years from the date on which a final Regional plan, or final Development plan comes into force or if proceedings for the acquisition of such land under this Act or under the Land Acquisition Act, 1894 (1 of 1894), are not commenced within such period, the owner or any person interested in the land may serve notice on the Planning Authority, Development Authority or as the case may be, Appropriate Authority to that effect, and if within six months from the date of service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed, and thereupon, the land shall be deemed to be released from such reservation, allotment or designation and shall become available to the owner for the purpose of development as otherwise, permissible in the case of adjacent land under the relevant plan.”

10. The above-reproduced provisions were considered by this Court in Municipal Corporation of Greater Bombay v. Dr. Hakimwadi Tenants’ Association 1988 (Supp.) SCC 55. The facts of that case were that the Planning Authority had published a draft Development plan in respect of ‘D’ ward showing the property belonging to late Dr. Eruchshaw Jamshedji Hakim as reserved for recreation ground. The final Development plan was made effective from 7.2.1967. However, no action was taken for the acquisition of land. The owner served purchase notice dated 1.7.1977 on the Commissioner of the Corporation. After about 6 months, the Corporation passed resolution dated 10.1.1978 for the acquisition of land and sent an application to the State Government for taking necessary steps. Thereupon, the State Government issued Notification dated 7.4.1978 under Section 6 of the Land Acquisition Act, 1894 (for short, ‘the 1894 Act’).

The writ petition filed by Dr. Hakimwadi Tenants’ Association questioning the notification was allowed by the learned Single Judge of the Bombay High Court, who held that the acquisition proceedings commenced by the State Government under Section 126(2) of the 1966 Act at the instance of the Planning Authority were not valid because steps were not taken for the acquisition of land under Section 126(1) of the 1966 Act read with Section 6 of the 1894 Act within the prescribed time. The learned Single Judge observed that the period of six months prescribed under Section 127 of the 1966 Act began to run from the date of service of purchase notice and the Corporation had to take steps to acquire the property before 4.1.1978, which was not done.

The Division Bench of the High Court approved the view taken by the learned Single Judge and held that the most crucial step was the application to be made by the Corporation to the State Government under Section 126(1) of the 1966 Act for the acquisition of the land and such step ought to have been taken within the period of six months commencing from 4.7.1977. This Court agreed with the counsel for the Corporation that the words ‘six months from the date of service of such notice’ used in Section 127 of the 1966 Act were not susceptible to a literal construction, but observed: “8. it must be borne in mind that the period of six months provided by Section 127 upon the expiry of which the reservation of the land under a Development Plan lapses, is a valuable safeguard to the citizen against arbitrary and irrational executive action. Section 127 of the Act is a fetter upon the power of eminent domain.

By enacting Section 127 the legislature has struck a balance between the competing claims of the interests of the general public as regards the rights of an individual.” (emphasis supplied) The Court then made detailed analysis of Section 127 of the 1966 Act and held: “10. Another safeguard provided is the one under Section 127 of the Act. It cannot be laid down as an abstract proposition that the period of six months would always begin to run from the date of service of notice. The Corporation is entitled to be satisfied that the purchase notice under Section 127 of the Act has been served by the owner or any person interested in the land.

If there is no such notice by the owner or any person, there is no question of the reservation, allotment or designation of the land under a development plan of having lapsed. It a fortiori follows that in the absence of a valid notice under Section 127, there is no question of the land becoming available to the owner for the purpose of development or otherwise. In the present case, these considerations do not arise. We must hold in agreement with the High Court that the purchase notice dated July 1, 1977 served by Respondents 4-7 was a valid notice and therefore with the failure of the appellant to take any steps for the acquisition of the land within the period of six months there from, the reservation of the land in the Development Plan for a recreation ground lapsed and consequently, the impugned notification dated April 7, 1978 under Section 6 of the Land Acquisition Act issued by the State Government must be struck down as a nullity.

11. Section 127 of the Act is a part of the law for acquisition of lands required for public purposes, namely, for implementation of schemes of town planning. The statutory bar created by Section 127 providing that reservation of land under a development scheme shall lapse if no steps are taken for acquisition of land within a period of six months from the date of service of the purchase notice, is an integral part of the machinery created by which acquisition of land takes place. The word “aforesaid” in the collocation of the words “no steps as aforesaid are commenced for its acquisition” obviously refer to the steps contemplated by Section 126(1).

The effect of a declaration by the State Government under sub-section (2) thereof, if it is satisfied that the land is required for the implementation of a regional plan, development plan or any other town planning scheme, followed by the requisite declaration to that effect in the official Gazette, in the manner provided by Section 6 of the Land Acquisition Act, is to freeze the prices of the lands affected.

The Act lays down the principles of fixation by providing firstly, by the proviso to Section 126(2) that no such declaration under sub-section (2) shall be made after the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan, secondly, by enacting sub-section (4) of Section 126 that if a declaration is not made within the period referred to in sub-section (2), the State Government may make a fresh declaration but, in that event, the market value of the land shall be the market value at the date of the declaration under Section 6 and not the market value at the date of the notification under Section 4, and thirdly, by Section 127 that if any land reserved, allotted or designated for any purpose in any development plan is not acquired by agreement within 10 years from the date on which a final regional plan or development plan comes into force or if proceedings for the acquisition of such land under the Land Acquisition Act are not commenced within such period, such land shall be deemed to be released from such reservation, allotment or designation and become available to the owner for the purpose of development on the failure of the Appropriate Authority to initiate any steps for its acquisition within a period of six months from the date of service of a notice by the owner or any person interested in the land.

It cannot be doubted that a period of 10 years is long enough. The Development or the Planning Authority must take recourse to acquisition with some amount of promptitude in order that the compensation paid to the expropriated owner bears a just relation to the real value of the land as otherwise, the compensation paid for the acquisition would be wholly illusory. Such fetter on statutory powers is in the interest of the general public and the conditions subject to which they can be exercised must be strictly followed.” (emphasis supplied)

11. The same issue was again considered in Girnar Traders (II). S.P. Building Corporation was the owner of a piece of land bearing City Sy. No. 18/738 admeasuring about 5387.35 square yards situated at Carmichael Road, Malabar Hill Division, Mumbai. The Development plan prepared by Bomba Municipal Corporation was sanctioned by the State Government on 6.1.1967 and was enforced on 7.2.1967. The land belonging to S.P. Building Corporation was notified as “open space and children’s park”. After coming into force of the 1966 Act, the landowners served notice under Section 127 of that Act for de-reservation of the land. Two similar notices were issued by S.P. Building Corporation on 18.10.2000 and 15.3.2002.

After about eight months, the State Government issued notification dated 20.11.2002 under Section 126(2) and (4) of the 1966 Act read with Section 6 of the 1894 Act. Writ Petition No.353/2005 filed by S.P. Building Corporation questioning the notification issued by the State Government was dismissed by the Division Bench of the High Court by observing that Resolution dated 9.9.2002 passed by the Improvement Committee of the Municipal Corporation would constitute a step as contemplated by Section 127 of the 1966 Act. The Division Bench further held that Section 11A of the 1894 Act, as amended, is not applicable to the proceedings initiated for the acquisition of land under the 1966 Act. Civil Appeal No.3922/2007 filed by S.P. Building Corporation was decided by the three Judge Bench along with Civil Appeal No.3703/2003 – Girnar Traders v. State of Maharashtra. Speaking for the majority, P.P. Naolekar, J., referred to the relevant provisions of the 1966 Act including Sections 126 and 127, and observed:

“31. Section 127 prescribes two time periods. First, a period of 10 years within which the acquisition of the land reserved, allotted or designated has to be completed by agreement from the date on which a regional plan or development plan comes into force, or the proceedings for acquisition of such land under the MRTP Act or under the LA Act are commenced. Secondly, if the first part of Section 127 is not complied with or no steps are taken, then the second part of Section 127 will come into operation, under which a period of six months is provided from the date on which the notice has been served by the owner within which the land has to be acquired or the steps as aforesaid are to be commenced for its acquisition.

The six-month period shall commence from the date the owner or any person interested in the land serves a notice on the planning authority, development authority or appropriate authority expressing his intent claiming dereservation of the land. If neither of the things is done, the reservation shall lapse. If there is no notice by the owner or any person interested, there is no question of lapsing reservation, allotment or designation of the land under the development plan. Second part of Section 127 stipulates that the reservation of the land under a development scheme shall lapse if the land is not acquired or no steps are taken for acquisition of the land within the period of six months from the date of service of the purchase notice.

The word “aforesaid” in the collocation of the words “no steps as aforesaid are commenced for its acquisition” obviously refers to the steps contemplated by Section 126 of the MRTP Act. If no proceedings as provided under Section 127 are taken and as a result thereof the reservation of the land lapses, the land shall be released from reservation, allotment or designation and shall be available to the owner for the purpose of development. The availability of the land to the owner for the development would only be for the purpose which is permissible in the case of adjacent land under the relevant plan. Thus, even after the release, the owner cannot utilise the land in whatever manner he deems fit and proper, but its utilisation has to be in conformity with the relevant plan for which the adjacent lands are permitted to be utilised.”

(emphasis supplied) Naolekar, J. then referred to the judgment in Dr. Hakimwadi Tenants’ Association (supra) and observed: “52. Thus, after perusing the judgment in Municipal Corpn. of Greater Bombay case we have found that the question for consideration before the Court in Municipal Corpn. of Greater Bombay case has reference to first step required to be taken by the owner after lapse of 10 years’ period without any step taken by the authority for acquisition of land, whereby the owners of the land served the notice for dereservation of the land. The Court was not called upon to decide the case on the substantial step, namely, the step taken by the authority within six months of service of notice by the owners for dereservation of their land which is second step required to be taken by the authority after service of notice.

53. The observations of this Court regarding the linking of word “aforesaid” from the wordings “no steps as aforesaid are commenced for its acquisition” of Section 127 with the steps taken by the competent authority for acquisition of land as provided under Section 126(1) of the MRTP Act, had no direct or substantial nexus either with the factual matrix or any of the legal issues raised before it. It is apparent that no legal issues, either with respect to interpretation of words “no steps as aforesaid are commenced for its acquisition” as stipulated under the provisions of Section 127 or any link of these words with steps to be taken on service of notice, were contended before the Court. Thus, observations of the Court did not relate to any of the legal questions arising in the case and, accordingly, cannot be considered as the part of ratio decidendi. Hence, in light of the aforementioned judicial pronouncements, which have well settled the proposition that only the ratio decidendi can act as the binding or authoritative precedent, it is clear that the reliance placed on mere general observations or casual expressions of the Court, is not of much avail to the respondents.

54. When we conjointly read Sections 126 and 127 of the MRTP Act, it is apparent that the legislative intent is to expeditiously acquire the land reserved under the Town Planning Scheme and, therefore, various periods have been prescribed for acquisition of the owner’s property. The intent and purpose of the provisions of Sections 126 and 127 has been well explained in Municipal Corpn. of Greater Bombay case.

If the acquisition is left for time immemorial in the hands of the authority concerned by simply making an application to the State Government for acquiring such land under the LA Act, 1894, then the authority will simply move such an application and if no such notification is issued by the State Government for one year of the publication of the draft regional plan under Section 126(2) read with Section 6 of the LA Act, wait for the notification to be issued by the State Government by exercising suo motu power under sub-section (4) of Section 126; and till then no declaration could be made under Section 127 as regards lapsing of reservation and contemplated declaration of land being released and available for the landowner for his utilisation as permitted under Section 127. Section 127 permitted inaction on the part of the acquisition authorities for a period of 10 years for dereservation of the land. Not only that, it gives a further time for either to acquire the land or to take steps for acquisition of the land within a period of six months from the date of service of notice by the landowner for dereservation.

The steps towards commencement of the acquisition in such a situation would necessarily be the steps for acquisition and not a step which may not result into acquisition and merely for the purpose of seeking time so that Section 127 does not come into operation. 56. The underlying principle envisaged in Section 127 of the MRTP Act is either to utilise the land for the purpose it is reserved in the plan in a given time or let the owner utilise the land for the purpose it is permissible under the town planning scheme. The step taken under the section within the time stipulated should be towards acquisition of land. It is a step of acquisition of land and not step for acquisition of land.

It is trite that failure of authorities to take steps which result in actual commencement of acquisition of land cannot be permitted to defeat the purpose and object of the scheme of acquisition under the MRTP Act by merely moving an application requesting the Government to acquire the land, which Government may or may not accept. Any step which may or may not culminate in the step for acquisition cannot be said to be a step towards acquisition. 57. It may also be noted that the legislature while enacting Section 127 has deliberately used the word “steps” (in plural and not in singular) which are required to be taken for acquisition of the land.

On construction of Section 126 which provides for acquisition of the land under the MRTP Act, it is apparent that the steps for acquisition of the land would be issuance of the declaration under Section 6 of the LA Act. Clause (c) of Section 126(1) merely provides for a mode by which the State Government can be requested for the acquisition of the land under Section 6 of the LA Act. The making of an application to the State Government for acquisition of the land would not be a step for acquisition of the land under reservation. Sub – section (2) of Section 126 leaves it open to the State Government either to permit the acquisition or not to permit, considering the public purpose for which the acquisition is sought for by the authorities.

Thus, the steps towards acquisition would really commence when the State Government permits the acquisition and as a result thereof publishes the declaration under Section 6 of the LA Act. 58. The MRTP Act does not contain any reference to Section 4 or Section 5-A of the LA Act. The MRTP Act contains the provisions relating to preparation of regional plan, the development plan, plans for comprehensive developments, town planning schemes and in such plans and in the schemes, the land is reserved for public purpose. The reservation of land for a particular purpose under the MRTP Act is done through a complex exercise which begins with land use map, survey, population studies and several other complex factors. This process replaces the provisions of Section 4 of the LA Act and the inquiry contemplated under Section 5-A of the LA Act.

These provisions are purposely excluded for the purposes of acquisition under the MRTP Act. The acquisition commences with the publication of declaration under Section 6 of the LA Act. The publication of the declaration under sub-sections (2) and (4) of Section 126 read with Section 6 of the LA Act is a sine qua non for the commencement of any proceedings for acquisition under the MRTP Act. It is Section 6 declaration which would commence the acquisition proceedings under the MRTP Act and would culminate into passing of an award as provided in sub-section (3) of Section 126 of the MRTP Act. Thus, unless and until Section 6 declaration is issued, it cannot be said that the steps for acquisition are commenced.

59. There is another aspect of the matter. If we read Section 126 of the MRTP Act and the words used therein are given the verbatim meaning, then the steps commenced for acquisition of the land would not include making of an application under Section 126(1)(c) or the declaration which is to be made by the State Government under sub – section (2) of Section 126 of the MRTP Act. 60. On a conjoint reading of sub-sections (1), (2) and (4) of Section 126, we notice that Section 126 provides for different steps which are to be taken by the authorities for acquisition of the land in different eventualities and within a particular time span.

Steps taken for acquisition of the land by the authorities under Clause (c) of Section 126(1) have to be culminated into Section 6 declaration under the LA Act for acquisition of the land in the Official Gazette, within a period of one year under the proviso to sub-section (2) of Section 126. If no such declaration is made within the time prescribed, no declaration under Section 6 of the LA Act could be issued under the proviso to sub-section (2) and no further steps for acquisition of the land could be taken in pursuance of the application moved to the State Government by the planning authority or other authority.

61. Proviso to sub-section (2) of Section 126 prohibits publication of the declaration after the expiry of one year from the date of publication of draft regional plan, development plan or any other plan or scheme. Thus, from the date of publication of the draft regional plan, within one year an application has to be moved under Clause (c) of Section 126(1) which should culminate into a declaration under Section 6 of the LA Act. As per the proviso to sub-section (2) of Section 126, the maximum period permitted between the publication of a draft regional plan and declaration by the Government in the Official Gazette under Section 126(2) is one year. In other words, during one year of the publication of the draft regional plan, two steps need to be completed, namely,

(i) application by the appropriate authority to the State Government under Section 126(1)(c); and

(ii) declaration by the State Government on receipt of the application mentioned in Clause (c) of Section 126(1) on satisfaction of the conditions specified under Section 126(2). The only exception to this provision has been given under Section 126(4).”

(emphasis supplied)

12. Recently, another three Judge Bench, of which both of us were members, considered the scope of Sections 126 and 127 of the 1966 Act in the Civil Appeal arising out of SLP(C) No.9934 of 2009 Shrirampur Municipal Council, Shrirampur v. Satyabhamabai Bhimaji Dawkher and others and connected matters and reiterated the view expressed by the majority in Girnar Traders v. State of Maharashtra (supra).

13. In the last mentioned judgment, the Court emphasized that if any private land is shown as reserved in the Development plan, the same can be acquired within 10 years either by agreement or by following the procedure prescribed under the 1894 Act and if proceedings for the acquisition of the land are not commenced within that period and a further period of six months from the date of service of notice under Section 127 of the 1966 Act, reservation will be deemed to have lapsed and the land will be available for development by the owner.

14. By applying the ratio of the above-noted judgments to the facts of this case, we hold that the High Court did not commit any error by declaring that reservation of the land owned by respondent No.1 had lapsed and the rejection of its application for construction of library building was legally unsustainable.

ACTS: section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013-Section 38 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973

SUPREME COURT OF INDIA

Indore Development Authority Vs. Shailendra (D) through LRS. & Ors.

[Civil Appeal No.20982 of 2017 arising out of S.L.P. (C) No.2131 of 2016]

ARUN MISHRA, J.

1. Leave granted.

2. The question arises whether by virtue of the provisions contained in section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as “the Act of 2013”), the proceedings lapsed in the instant case.

3. The facts in short are that the Indore Development Authority (for short, “the IDA”) established under section 38 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (for short, “the Adhiniyam of 1973”) prepared a Master Plan which came into force on 21.3.1995, formulated scheme Nos.124(A) and (B) under section 50(1) of the Adhiniyam of 1973 and decided to acquire land for the purpose of constructing Ring Road and Link Road on the outskirts of Indore city. The ring road has been fully constructed. The land was acquired for the purpose of constructing Link Road, for joining the major road to the Ring Road under Scheme 124(B). Possession of the land is stated to be with the encroachers and not with the landowners.

The compensation was deposited by the IDA with the Land Acquisition Collector. The landowners were informed to collect it but they had refused and did not receive the compensation. The IDA published the schemes as per the provisions of the Adhiniyam of 1973. On 6.2.1991, a prayer was made to the Collector to acquire the land and on 2.3.1994 compensation was deposited with the Land Acquisition Collector. Notification under section 4 was 3 issued on 23.12.1994. Section 17(1) was also invoked. Enquiry under section 5A was dispensed with. Declaration under section 6 was published on 17.3.1995 under the Land Acquisition Act, 1894 (hereinafter referred to as “the Act of 1894”).

Respondent No.1 – owner filed objections before the Land Acquisition Officer claiming compensation of Rs.32,50,000/-. Award was passed by the LAO on 14.3.1997 and the sum awarded to respondent No.1 was Rs.7,90,813/-. A belated W.P. No.1182 of 1997 was filed for quashing the acquisition proceedings. It was allowed on 28.8.1998 holding that the scheme lapsed on expiry of three years. Enquiry under section 5A was illegally dispensed with. Letters Patent Appeal No.480 of 1998 was preferred before the Division Bench and on 29.1.2000 an order of status quo was passed. The LPA was dismissed as not maintainable. However this Court remitted the matter to the High Court to file writ appeal under the provisions of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal) Adhiniyam, 2005. On 4.4.2007 the High Court directed maintenance of status quo.

4. The respondent filed an application raising the ground under section 24(2) of the Act of 2013. It was resisted by the IDA on the ground that the acquisition had been completed and the amount has been deposited with the Land Acquisition Collector. Construction is almost complete. If it is not completed in the remaining area, it will cause great hardship to the citizens and widening of road was necessary for smooth flow of traffic. The High Court by the impugned order dated 3.11.2014 held that the proceedings had lapsed in view of the decisions of this Court in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Anr. (2014) 3 SCC 183 and Shree Balaji Nagar Residential Association v. State of Tamil Nadu (2015) 3 SCC 353.

5. Shri P.S. Patwalia, learned senior counsel urged that there was no lapse of proceedings in the instant case as compensation was offered but was not accepted by 5 landowners. For their own refusal they cannot lay the blame at the door of the IDA. The provisions of section 24 cannot come to the rescue of such incumbents. Even if the compensation has not been deposited with the Reference Court under section 31(2) of the Act of 1894 the effect would be of payment of higher interest under section 34.

The expression used in section 24 of the Act of 2013 is ‘compensation has not been paid’. It is not that that the expression used is that it has not been deposited under section 31. It was further submitted there was no lapse of the proceedings under the Act of 1894 in view of non-deposit under section 31. The only liability was of higher interest of 9% for the first year from the date of taking possession and thereafter to pay the interest at 15%.

When the consequence of lapse of land acquisition proceedings was not provided in the Act of 1894, in case of failure to deposit under section 31(2), the provision of section 34 is attracted regarding payment of interest. Thus it could not be said that due to failure to deposit or in the case of refusal, proceedings would lapse. Section 24(2) would apply to a case where compensation has not been tendered to the landowners and has not been deposited with the Land Acquisition Collector for payment. In other words, no arrangement has been made by the acquisitioning authority or the beneficiary for payment of compensation.

The provisions of section 24 would not be applicable in case there is refusal to accept the compensation and there was litigation by the landowner or on his behalf by successor-in-interest, to quash the land acquisition proceedings in such a case for their own wrong and for non-acceptance of compensation, it could not be claimed by such incumbents when they have themselves obtained interim orders from the court or where the proceedings have been illegally quashed by the High Court and an appeal etc. is pending to invoke the benefit of the provisions of section 24 of the Act of 2013.

In the instant case award has been passed, compensation has been deposited with the Land Acquisition Collector for payment to landowners and they had declined to accept it. The stale claims are also being agitated in this Court under the guise of section 24 whereas it does not protect such claims. It was also submitted that when the High Court has illegally quashed the notification and interim order was passed, the benefit of section 24 cannot enure to the landowners in such cases as the act of court cannot prejudice anybody.

6. It was contended on behalf of the landowners that the impugned order is proper. It is in tune with Pune Municipal Corporation (supra) and other decisions like Shree Balaji (supra) etc. referred to therein, hence no case for interference was made out. Sections 31 and 34 of the Act of 1894 are extracted hereunder : “31. Payment of compensation or deposit of same in Court. –

(1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.

(2) If they shall not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under section 18 would be submitted: Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount:

Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under section 18:

Provided also that nothing herein contained shall affect the liability of any person, who may receive the whole or any part of any compensation awarded under this Act, to pay the same to the person lawfully entitled thereto.

(3) Notwithstanding anything in this section the Collector may, with the sanction of [appropriate Government] instead of awarding a money compensation in respect of any land, make any arrangement with a person having a limited interest in such land, either by the grant of other lands in exchange, the remission of land-revenue on other lands held under the same title, or in such other way as may be equitable having regard to the interests of the parties concerned.

(4) Nothing in the last foregoing sub-section shall be construed to interfere with or limit the power of the Collector to enter into any arrangement with any person interested in the land and competent to contract in respect thereof.

34. Payment of interest.– When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of [nine per centum] per annum from the time of so taking possession until it shall have been so paid or deposited: [Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date or expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry.]”

7. Section 24 of the Act of 2013 is extracted hereunder :

“24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.-

(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,-

(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or

(b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:

Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.” 11 Provisions of section 12 of the Act of 1894 are extracted hereunder :

“12. Award of Collector when to be final. –

(1) Such award shall be filed in the Collector’s office and shall, except as hereinafter provided, be final and conclusive evidence, as between the Collector and the persons interested, whether they have respectively appeared before the Collector or not, of the true area and value of the land, and the appointment of the compensation among the persons interested.

(2) The Collector shall give immediate notice of his award to such of the persons interested as are not present personally or by their representatives when the award is made.”

8. Shri Patwalia, learned senior counsel, urged that the expression used ‘compensation has not been paid’ in section 24(2) does not relate to deposit of the amount as envisaged under section 31(2) of the Act of 1894. The proviso to sub-section (2) of section 24 uses the expression “where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries”.

Compensation in respect of a majority of land holdings is not deposited in the account of beneficiaries, is not applicable as it was not the case set up and that the claim was not made under the proviso to sub-section (2) of section 24. There is vast difference between the provision of section 24(2) and its proviso. The expressions payment and deposit are used with different objectives. They have to be given the proper meanings which aspect has not been considered in any of the decisions relied upon by the High Court including Pune Municipal Corporation (supra).

9. It was also submitted by learned senior counsel on behalf of the IDA that in case of failure to deposit the amount before the Reference Court where the “reference would be submitted”, the only consequence to follow would be higher rate of interest as per the amended provision of section 34. The proviso has been added in the year 1984 providing 15% interest payable from the date of expiry of the said period of one year and for the first year the rate of interest would be 9% per annum. The proceedings of acquisition would not lapse.

It is in order to save the liability to make payment of higher interest that the provision of section 31 has been enacted, and the rate of interest, as prescribed under section 34, is higher than in any Government security/FD with the bank. Thus the failure to deposit the amount in the Reference Court entails the consequence of attraction of section 34. Thus, the proceedings would not lapse under the Act of 1894.

When it was so contemplated that under the Act of 1894 the provisions of section 24 cannot be assigned that meaning which would invalidate the proceedings owing to the procedural lapse of deposit of the amount in the court where the reference would be submitted.

10. It was also submitted that section 24 in fact is attracted to a case where there is deliberate failure on the part of the acquisitioning authority not only to tender the amount but also where no arrangement has been made and the amount has not been deposited with the Land Acquisition Collector, and the land has been acquired.

Proviso to section 24(2) makes it clear that the amount of compensation required to be deposited in the account of beneficiaries (in case of failure to make the deposit) with respect to majority of the land holdings, all the beneficiaries would become entitled for higher compensation under the new Act. In case amount has been tendered/deposited with the Land Acquisition Collector and has been deposited in the separate account of the beneficiaries in the concerned Treasury as per the provisions of the Finance Code/Rules of the concerned State, that has to be treated as sufficient compliance of the proviso to section 24(2) of the Act of 2013.

11. It was urged that in case landowners do not consent to receive the amount, the Collector was required to deposit it in the Reference Court as provided in section 31(2) but failure to make the deposit has been culled out in the Act itself as provided in section 34. Thus proceedings would not lapse.

12. It was also urged that section 31 of the Act clearly shows that consequence of non-compliance of sub-section (1) or sub-section (2) thereof is not that of the acquisition proceedings becoming invalid. The Act of 1894 never intended that the consequence of non-compliance of said provision of the Act, proceedings would become invalid. Reliance has been placed on Hissar Improvement Trust vs. Rukmani Devi and Anr. (1990) (Supp) SCC 806 in which this Court has laid down thus : “5. It cannot be gainsaid that interest is due and payable to the landowner in the event of the compensation not being paid or deposited in time in Court. Before taking possession of the land, the Collector has to pay or deposit the amount awarded, as stated in Section 31, failing which he is liable to pay interest as provided in Section 34.

7. We make it clear that insofar as the landowner is concerned, his right to be compensated is enforceable against the State. It is the liability of the Collector in terms of the relevant provisions to pay the amount awarded, together with interest in the event of the amount not being paid in time. The liability of the appellant-Trust arising under its agreement with the Government for payment in respect of the property acquired is a matter on which we express no view.”

13. Reliance has also been placed on Shri Kishan Das & Ors. v. State of U.P. & Ors. AIR 1996 SC 274, wherein this Court has observed that the liability to pay the interest arises when possession of the acquired land was taken and the amount was not deposited under section 31. This Court took note of the delay caused by the petitions filed by the claimants in the High Court and this Court, and held that even payment of interest under section 34 cannot be ordered. This Court has observed in Shri Kishan Das (supra) thus :

“3. Shri S.B. Sanyal, learned senior counsel for the appellants, contended that the award was made on March 22, 1983 though the acquisition was made in September 1976. Therefore, the appellants should be compensated by payment of interest @ 12 per cent per annum. In support of his contention, he placed reliance on the decision of this Court in Ram Chand and Ors. v. Union of India and Ors. (1994) 1 SCC 44 and in particular on paragraph 16 of the judgment. It is seen that in Ram Chander’s case even after the dismissal of the writ petitions by this Court in Aflatoon v. Lt. Governor of Delhi 17 [1975] 1 SCR 802, no action was taken by the Land Acquisition Officer to pass the award.

Thus, till 1980-81 no award was made in respect of any of the acquisitions. Under these circumstances, this Court had directed the Government to pay interest @ 12 per cent on the amount awarded to compensate the loss caused to the appellants therein. In this case it is seen that though the notification was issued in September 1976, the writ petitions came to be filed in the High Court immediately thereafter in 1977 in the High Court and obviously further proceedings were stayed. Accordingly, the Land Acquisition Officer delayed the award. After the dismissal of the writ petitions, the appellants came to this Court and obtained status quo. Obviously, the Land Acquisition Officer was not in a position to pass the award immediately.

Thereafter it would appear that he passed the award on March 22,1983. Section 34 of the Act obligates the State to pay interest from the date of taking possession under the unamended Act @ 6 per cent and after the Amendment Act 68 of 1984 at different rates mentioned therein. The liability of the State to pay interest ceases with the deposit made as per Section 34 of the Act. Further liability would arise only when the court on reference under Section 18 enhances the compensation under Section 28 of the Act. Similarly, in an appeal under Section 54 of the Act if the appellate court further increases the compensation, then again similar obligation under Section 28 arises.

4. In the light of the operation of the respective provisions of Sections 34 and 28 of the Act, it would be difficult to direct payment of interest. In fact, Section 23(1-A) is s set off for loss in cases of delayed awards to compensate the person entitled to receive compensation; otherwise a person who is responsible for the delay in disposal of the acquisition proceedings will be paid premium for dilatory tactics.

It is stated by the learned Counsel for the respondents that the amount of interest was also calculated and total amount was deposited in the account of the appellants by the Land Acquisition Officer after passing the award, i.e., on November 15, 1976 in a sum of Rs.20,48,615. Under these circumstances, the liability to pay interest would arise when possession of the acquired land was taken and the amount was not deposited. In view of the fact that compensation was deposited as soon as the award was passed, we do not think that it is a case for us to interfere at this stage.”

14. It was also urged that ordinarily when a reference is submitted, the Collector should deposit the amount of compensation into court, but the deposit of the amount is not a condition precedent to the entertainability of the reference as held in Jogesh Chandra v. Yakub Ali, 29 IC 111.

15. It was also urged that the payment is tendered by issue of a notice on the party fixing the date on which and the place where the payment would be made. The notice is given along with the notice of award under section 12(2) in which the date on which possession would be taken is also mentioned.

16. It was also urged that there are Financial Department’s orders in various States prevailing as well as in certain States Civil Court Rules also prevail which require the deposit of the Government money in the Treasury after particular time necessarily money goes to the treasury. Thus, a deposit in the treasury in the landowner’s account cannot be said to be illegal or impermissible as that is as per the standing orders and it is a matter of procedure only where the deposit is made. In case the deposit is made in the treasury, liability would still remain to make the payment of interest under section 34 of the Act of 1894. There are five methods of making payment:

(i) by direct payments;

(ii) by order on treasury;

(iii) by 20 money order;

(iv) by cheque; and

(v) by deposit in a treasury.

They are governed by the rules contained in the Civil Account Code and in the local instructions issued by various Provincial Governments, which are required to be scrupulously followed. For Punjab, Financial Commissioner’s standing order No.28 paras 74 and 75 lay down such procedure. It was also urged that in Damadilal v. Parashram, AIR 1976 SC 2229, it was observed that payment by cheque is a valid tender.

17. It was also urged that when a reference is made to a District Court and in case amount of compensation is increased, the amount also is required to be deposited as ordered by the court but it would not invalidate acquisition proceedings. Reliance has been placed on Viraraghava v. Krishnasami, ILR 6 Mad. 347 in which it was observed that the money paid into the treasury is to be considered as money or movable property impressed with the trusts and obligations of the immovable property which it represents. The rights of parties to the land, and to any mortgage on, or interest in it, are transferred to the compensation money.

18. It was also urged that the object of such deposit is to prevent unnecessary prolongation of the proceedings and accumulation of Collector’s liability for interest. When a party willfully refuses to receive payment by depositing the money in the court, the liability for interest will cease. It was also urged that section 32 does not intend to give the advantage of one’s own act or the act of the court.

19. It was also urged that this Court is also bound to prevent the abuse of process of law. The cases which have been concluded are being revived. In spite of not accepting the compensation deliberately and statements are made in the court that they do not want to receive the compensation at any cost and they are agitating the matter time and again after having lost the matters and when proceedings are kept pending by interim orders by filing successive petitions, the provisions of section 24 cannot be invoked by such landowners.

20. There is already a reference made as to the applicability of section 24 in SLP [C] No.10742/2008 — Yogesh Neema & Ors. v. State of M.P. & Ors. vide order dated 12.1.2016. There are several other issues arising which have been mentioned above but have not been considered in Pune Municipal Corpn. (supra). Thus, here is a case where the matter should be considered by a larger Bench. Let the matter be placed before Hon’ble the Chief Justice of India for appropriate orders.

What is fair and reasonable market value of any acquired land on the date of its acquisition. It is held that such a question is always a question of fact and its answer depends on the nature of evidence, circumstances and probabilities appearing in each case

The relevant factors emerging from the evidence and the findings of the Courts below on the issues such as – the location of the acquired land, its surroundings, nature, potentiality, rates of small plots, the purpose of acquisition, development cost needed, non-availability of the sale deeds for large areas sold in acres, etc., for determination of the just, fair and proper market value of the acquired land

3. Facts of the case are taken from C.A. No.2846 of 2017 (Bijender & Ors. vs. State of Haryana & Anr.) need mention, in detail, to appreciate the controversy involved in these appeals.

4. The land of the appellants measuring 18362 sq. yds. equivalent to 30 kanal 07 marla being 1122/37/15 share out of total acquired land measuring 100 kanal 11 marla from the total land measuring 185 kanal 15 marla of khewat No.1396 khata nos.1658 and 1659 revenue estate of Safidon, situated at a village Saifdon, District Jind, Haryana was acquired. The land was acquired for the development and utilization of commercial and residential for HUDA Sectors 7, 8 and 9 in Safidon City in Distt. Jind vide three Notifications. Along with the land of the appellants, the State also acquired land belonging to several landowners alike the appellants.

5. Notification bearing No.LAC(H)-2007-NTLA/376 on 23.08.2007 under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as the “the Act”) was issued for the acquisition of 142 acres of land in village Singhpura, for public purpose, namely, for the development of residential, commercial Sector 7, Safidon.

6. Notification bearing No.LAC(H)-2007-NTLA/379 on 23.08.2007 under Section 4 of the Act was issued for the acquisition of 249.49 acres land in villages Safidon, Singhpura, Rampura, Ratta Khera and Khera Khemawati for public purpose, namely, for the development of residential, commercial sector 8 at Safidon.

7. Notification bearing No.LAC(H)-2007-NTLA/382 on 23.08.2007 under Section 4 of the Act was issued for the acquisition of 167.79 acres of land in village Safidon, Khera Khemawati for the public purpose, namely, for the development of residential and commercial sector 9 at Safidon.

8. The said notifications were published in the newspapers. The objections to the said notifications were also invited. However, the objections filed by the landowners were rejected by Collector finding no merit therein under Section 5A of the Act.

9. This was followed by 3 declarations made and published under Section 6 of the Act on 21.08.2008 bearing No. LAC(H)-2008-NTLA/423 in respect of the land measuring 74.10 acres of land in village Singhpura, LAC(H)-2008-NTLA/426 in respect of the land measuring 199.57 acres of land in village Safidon, Singhpura, Rampura, Ratta Khera and Khera Khemawati and LAC(H)-2008-NTLA/429 in respect of the land measuring 150.97 acres in village Safidon and Khera Khemawati.

10. The Collector held an enquiry. He applied the Belting System for determining the market rate of land and, accordingly, classified the land in parts. On 19.08.2010, the Collector passed 3 Awards. By Award No.3 in respect of the land in village Singhpura, the Land Acquisition Officer awarded 6 compensation @ Rs.33 lacs per acre for the land up to the depth of 2 acres from Safidon-Jind Road and Safidon Bye-Pass Road and Gair Mumkin and for the land classified as “Nehri, Chahi”, he awarded Rs. 18 lacs per acre. The landowners were also awarded 30% solatium and additional amount @ 12% per annum from the date of notification under Section 4 of the Act till the Award as provided under Section 23 of the Act.

11. By Award No.4 in respect of the acquisition of land in village Safidon, Singhpura, Rampura, Ratta Khera and Khera Khemawati, the Land Acquisition Officer awarded compensation @ Rs.33 lacs per acre for the land up to the depth of 2 acres from Safidon-Jind Road and Safidon Bye-Pass Road and Gair Mumkin and @ Rs.18 lacs per acre for “Nehri, Chahi” Land. The landowners were also awarded 30% Solatium and additional amount @ 12% p.a. from the date of notification under Section 4 of the 7 Act till the award as provided under Section 23 of the Act.

12. By Award No.5 in respect of acquisition of land in village Safidon and Khera Khemawati, the Land Acquisition Officer awarded compensation @ Rs.33 lacs per acre for the land upto the depth of 2 acres from Safidon-Jind Road and Safidon Bye-pass Road and Gair Mumkin and Rs.18 lacs per acre for “Nehri, Chahi” land. The landowners were also awarded 30% Solatium and additional amount @ 12% p.a. from the date of notification under Section 4 of the Act till the Award as provided under Section 23 of the Act.

13. Being dissatisfied with the Awards, the landowners filed Reference Petitions under Section 18 of the Act before the Additional District Judge, Jind praying for enhancement of the compensation contending inter alia that the market value of the land at the time of acquisition was much higher 8 than what was offered by the Collector in his Awards. According to the appellants (landowners), the market value was to the tune of Rs.5000/- per sq. yds.

14. The Additional District Judge by its common Award dated 17.12.2013 dismissed all 305 reference petitions and, in consequence, upheld the Awards passed by the Collector. In other words, the Reference Court was of the view that the rate at which the compensation was determined by the Collector by applying the Belting System in working out the compensation was just and proper and as per Section 23 of the Act. The Reference Court, therefore, did not enhance the compensation awarded by the Collector. All the reference petitions were accordingly dismissed.

15. Aggrieved by the said Awards, the landowners filed separate Regular First Appeals before the High Court praying for enhancement of the 9 compensation.

16. By impugned judgments dated 22.12.2015, 22.03.2016 and 03.05.2016, the High Court partly allowed the appeals. The High Court held that the Awards of the Collector assessing compensation @Rs.33 lacs per acre for the land up to the depth of 2 acres on Safidon Jind Road, Safidon bye-Pass road does not call for any interference and hence they were upheld. However, so far as the other category of land (Nehri, Chahi) beyond 2 acres from the road was concerned, the High Court modified the Award and enhanced the compensation from Rs.18 lacs to Rs.24,75,000/- per acre. The High Court determined the market rate at Rs. 48,40,000/- per acre and then reducing by 33% worked out to Rs.32,42,800/- per acre, i.e., Rs.33,00,000/- per acre so far as Safidon-Jind land was concerned. So far as other land for which the Collector had awarded Rs.18 lacs per acre, the High 1 Court deducted 25% and thus worked out to Rs.24,75,000/- per acre.

17. Aggrieved by the said judgments, the landowners have filed these appeals by way of special leave before this Court.

18. Heard learned counsel for the parties.

19. Learned counsel appearing for the appellants (landowners) while assailing the legality and correctness of the impugned judgments mainly argued three points.

20. In the first place, learned counsel argued that the High Court having accepted in principle that the acquired land is a developed land and has potentiality in all respects coupled with the fact that it is surrounded by upcoming activities in any town erred in not properly determining the market value of the land as required under Section 23 of the Act read with law laid down by this Court in several cases.

21. In the second place, learned counsel argued that the appellants (landowners) had filed as many as 59 Sale deeds of the adjacent and nearby areas having a similar quality of land alike the acquired land before the Reference Court. Learned counsel urged that out of 59 sale deeds, two pieces of land were sold at the rate of Rs.4,500/- per square yard whereas remaining lands were also sold at different rates ranging between Rs.200/- to Rs.4,500/- per square yard.

22. It was, therefore, his submission that since the highest rate in the comparable sales is usually preferred for determining the market value of the acquired land, the High Court should have taken Rs.4,500/- per square yard to be the basis for determining the market value of the acquired land.

23. In the third place, learned counsel argued that the Collector, Reference Court and the High Court erred in applying the Belting System for determining 1 the market value of the acquired land which, according to learned counsel, wrongly resulted in classifying the acquired land in two parts and, in consequence, resulted in applying two rates for two parcels of the lands. One rate was for the land which is abutting the main road, whose rate was more as compared to the other land, and the land which is in interior from the main road, whose rate was less.

24. It was his submission that the Collector and the Reference Court failed to give any justifiable reasons as to why they choose to apply the Belting System for determining the market value of the acquired land. Similarly, according to learned counsel, the High Court also did not deal with this issue though raised by the appellants before the High Court in their appeals.

25. In reply, learned counsel for the respondent (State) supported the impugned judgments and 1 contended that the market value of the acquired land determined by the High Court which resulted in partially enhancing the rate in relation to one class of land which is in interior from Rs.18 lacs to Rs.24,75,000/- per acre, is just and proper and does not call for any further enhancement and nor the other class of land (Rs.33,00,000/- per acre) calls for any further enhancement and the same was rightly upheld by the High Court.

26. Learned counsel then pointed out several infirmities in the 59 comparable sale deeds relied on by the appellants and contended that these sale deeds should not be relied on for determining the market rate of the acquired land for the following reasons.

27. First, all the sale deeds pertained to very small pieces of land wherein the lands were sold in square yards, whereas the acquired land in question is very large and measures in acres (around 3001 acres or so). In other words, according to learned counsel, there is no comparison between the lands, which is the subject matter of the sale deeds relied on by the appellants (claimants), and the acquired land in question.

28. Second, some claimants, whose lands were acquired in these acquisition proceedings, had sold their part of the acquired lands in very small measures few months before the date of acquisition only with an intention to create evidence so that they may get the compensation for their acquired land at the same rate at which they sold their land.

29. In other words, according to the learned counsel, such sales could not be regarded as genuine sales between the seller and the buyer and were, in fact, the bogus sales brought into existence with a sole purpose to claim more compensation for their acquired lands.

30. Learned counsel, lastly, contended that there is no case made out by the appellants (landowners) to question the Belting System applied by the Courts below for determining the market rates of the acquired land inasmuch as having regard to the nature of the land and other factors, the Belting System was properly applied. Learned counsel, therefore, contended that the impugned judgments deserve to be upheld calling no interference.

31. Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeals in part and, in consequence, modify the impugned judgments by partially enhancing the compensation payable to the appellants for their acquired land to the extent indicated below.

32. Coming first to the question as to whether the Courts below were justified in applying the “Belting System” for determining the market rates of the acquired land in question?

33. We are of the considered opinion that keeping in view the nature, extent, size, surrounding and location of the acquired land, the Courts below were justified in applying Belting System for determining the market rate of the acquired land.

34. One cannot dispute that the Belting System is a judicially accepted method for determining the fair market value of the acquired land. It is applied in appropriate cases when different parcels of lands with different survey numbers belonging to different owners and having different locations are acquired which put together comprises of a large chunk of land. Such chunk cannot be taken as a compact block.

35. The acquired land having a frontage abutting the highway/main road always has a better value as compared to the land, which is away from the highway/main road. Indeed, farther the land from the highway/main road, lesser the value of such 1 land. In such a situation, where large pieces of land having different locations are acquired, Belting System is considered apposite for determining the market value of the lands. (see – Union of India & Ors. vs. Mangatu Ram & Ors. 1997 (6) SCC 59 and Andhra Pradesh Industrial Infrastructure Corporation Limited vs. G. Mohan Reddy & Ors. 2010 (15) SCC 412).

36. In Belting System, the acquired land is usually divided in two or three belts depending upon the facts of each case. The market value of the front belt abutting the main road is taken to fetch maximum value whereas the second belt fetches two third or so of the rate determined in relation to the first belt and the third belt, if considered proper to carve out, fetches half or so of the maximum. It is again depending upon facts of each case.

37. Similarly, this Court has consistently held on the question as to what is fair and reasonable market value of any acquired land on the date of its acquisition. It is held that such a question is always a question of fact and its answer depends on the nature of evidence, circumstances and probabilities appearing in each case.

38. It is held that one of the guiding factors in such cases is the conduct of a hypothetical willing vendor, who would offer the land and a willing purchaser in normal human conduct, would be willing to buy the land as a prudent man in normal market condition on the date of the notification under Section 4(1) of the Act but not an anxious buyer dealing at arm’s length nor facade or fictitious sales brought about in quick succession or otherwise to inflate the market value.

39. It is held that when the Courts are called upon to fix the market value of the land in compulsory acquisition, one of the types of evidence of the value of the property is the sale of the acquired land to 1 which the claimant is a party and in its absence, the sale of the neighboring lands.

40. It is held that the transactions relating to acquired land of recent dates or in the neighbourhood lands that possessed of similar potentiality or fertility or other advantageous features are considered to be relevant piece of evidence.

41. It is held that in proof of the sale transactions, the relationship of the parties to the transactions, the market conditions, the terms of the sale and the date of the sale are to be looked into. These features need to be established by examining either the vendor or vendee and if they are not available, the attesting witnesses who have personal knowledge of the transaction etc. The original or certified copies of the sale deeds are required to be tendered in evidence to prove such facts. One of the underlying principles to fix a fair market value with 2 reference to comparable sale is to reduce the element of speculation.

42. It is held that in comparable sale, the features are (1) it must be within a reasonable time of the date of the notification (2) it should be a bona fide transaction (3) it should be a sale of the land acquired or land adjacent to the land acquired and (4) it should possess similar advantages.

43. These factors should be established by adducing material evidence by examining the parties to the sale or persons having personal knowledge of the sale transactions. The proof thereof focuses on the fact whether the transactions relied on are genuine and bona fide transactions or not.

44. It is further held that it is the paramount duty of the Courts of facts to subject the evidence to close scrutiny with a view to objectively assess the evidence tendered by the parties on proper 2 considerations thereof in its correct perspective to arrive at a reasonable market value. The attending facts and circumstances in each case always furnish guidance to arrive at the market value of the acquired land. The neighbourhood lands possessed of similar potentialities or same advantageous features/circumstances available in each case are also to be taken into account.

45. Indeed, it is held that the object of the assessment of the evidence is to enable the Courts to arrive at a fair and reasonable market value of the lands and in that process, sometimes the Courts are required to trench on the border of the guesswork but mechanical assessment has to be eschewed.

46. It is also held that Judges are required to draw from their experience and the normal human conduct of the parties as to which transaction is bona fide and genuine sale transaction because that is one of the guiding factors in evaluating the evidence.

47. It is also held that the amount awarded by the Land Acquisition Collector forms an offer and that it is for the landowners to adduce relevant and material evidence to establish that the acquired lands are capable of fetching higher market value and the amount offered by the Land Acquisition Collector is inadequate and that he proceeded on wrong principle.

48. This Court also examined the question as to how the Courts should judge the potentiality of the acquired land and what are the relevant consideration, which should be taken into consideration for deciding the potentiality of the land.

49. It is held that potentiality means capacity or possibility for changing or developing into state of 2 actuality. The question as to whether the land has a potential value or not is primarily one of fact depending upon its condition, situation, user to which it is put or is reasonably capable of being put and whether it has any proximity to residential, commercial or industrial areas or institutions. The existing amenities such as water, electricity, possibility of their further extension, whether near about town is developing or has prospect of development need to be taken into consideration.

50. It is also held that the value of the smaller plots, which is always on the higher side, is usually not taken into consideration for determining the large block of the land. One of the reasons being that the substantial area of the large block is used for development of sites like laying out the roads, drains sewers, water and electricity lines and several civic amenities and to provide these facilities, lot of time is consumed. The deduction is, therefore, made, which ranges from 20% to 50% or in appropriate cases even more.

51. Keeping the aforementioned well settled principles of law in consideration, let us recapitulate the facts of the case hereinbelow to examine the issue arising in the case.

52. As mentioned above, the total land acquired for development and utilization of commercial and residential sector is situated in villages Safidon, Singpura, Rampura, Ratta Khera & Khera Khemawati in District Jind in State of Haryana. The acquired land comprises of more than around 300 acres or so and is thus a very large in chunk. The acquired land belonged to several landowners and obviously so being so large in volume. One side of the acquired land is abutting the road. The land has surrounding with some kind of activities in 2 nearby areas and this shows that the acquired land has some potential.

53. The Collector, therefore, taking into account all these factors considered it proper to classify the land on the basis of 2004-2005 revenue records in two heads for determining the compensation. The first head was in the name Nehri Chahi, i.e., canalling irrigated/water supplied from pipes in which land measuring 82-49 acres was included whereas the other parcel of land measuring around 117.08 acres, which is abutting the road, was included in other head in the name – To the depth of 2 acres from Safidon-Jind Road & Safidon bye pass Road and Gair Mumkin. – (see Award of the Collector dated 19.8.2010 (annexure P-3). The Collector made this classification by applying the Belting System. It is pertinent to mention that it was not objected by the landowners as would be clear from Para 3 of the Award dated 19.8.2010.

54. Since the land included under the head, i.e., Safidon- Jind Road and Safidon Bye pass Road and Gair Mumkin was abutting the road, the Collector fixed its market rate at Rs.33,00,000/- (Thirty Three Lacs) per acre up to the extent of the land going inside 2 acres from the road.

55. So far as the land included in the first head, i.e., Nehri- Chahi beyond 2 acres was concerned, the Collector fixed its market rate at Rs.18,00,000/- (Eighteen Lacs) per acre.

56. The Reference Court dismissed the reference and upheld the rates fixed by the Collector. The High Court, however, in an appeal filed by the appellants (claimants), in the impugned judgments, upheld the rate, i.e., Rs.33,00,000/- per acre so far as it relates to the land included in the head. – Safidon – Jind Road and Safidon Bye pass Road and Gair Mumkin saying that this does not need any enhancement but enhanced the rate from 2 Rs.18,00,000/- per acre to Rs.24,75,000/- per acre insofar as it pertained to land beyond 2 acres included in the head – Nehri Chahi.

57. We are of the considered opinion that the Collector was justified in applying the Belting System to the acquired land in question. Since the acquired land was a large chunk of land having its frontage abutting the roadside, the Belting System was rightly applied to the acquired land for determination of its fair market rate.

58. It is more so because we find that the appellants too did not raise any objection before the Collector and before the High Court and nor they were able to point out to us as to why it was not possible to apply the Belting System and what was illegal in its application.

59. It is for all these reasons, we find no merit in the submission of the learned counsel for the appellants when he questioned the application of the Belting System to the acquired land for determining its fair market value.

60. This takes us to examine the next question as to whether the highest rate of Rs.4500/- per square yard of the land of the nearby area out of sale deeds should be made basis for determining the market rate of the acquired land. In our opinion, it is not possible to accept this submission of the learned counsel for the appellants though pressed in service vehemently.

61. It is for the reason that firstly, the area sold in each sale deed is very small as compared to the acquired land.

Secondly, the lands which were sold by these sale deeds is in square yards and ranges from 31.06 square yards to 440 yards whereas the acquired area in question is in acres and comprises of more than 300 acres.

Thirdly, out of sale deeds, there are as many as 31 sale deeds wherein the area comprises of less than 100 square yards.

Fourthly, except two sale deeds where 60 and 67 square yard of land was sold for Rs.4,500/- per square yard, all other sale deeds value ranges between Rs.200/- to Rs.2000/- per square yard.

Fifthly, there can be no comparison between the two lands due to the extent of area which are two extremes and lastly, since no sale deeds were filed by the appellants showing market price of any large chunk of land sold in acres at the relevant time, it is not possible to place reliance on any of these sale deeds for determining the market rate of the acquired land by applying the same rate (Rs.4,500/- per square yard). It is, in our opinion, neither permissible and nor proper to rely solely upon the rates of small plots and then determine the compensation for a large chunk of acquired land as in this case.

62. We have applied our mind keeping in view all the relevant factors coupled with the law laid down by this Court. Taking into consideration all the relevant factors emerging from the evidence and the findings of the Courts below on the issues such as – the location of the acquired land, its surroundings, nature, potentiality, rates of small plots, the purpose of acquisition, development cost needed, non availability of the sale deeds for large areas sold in acres, etc., we are of the considered opinion that just, fair and proper market value of the acquired land in question on the date of issuance of Section 4 notification is determined at Rs.45,00,000/- (Forty Five Lacs) per acre in place of Rs.33,00,000/- (Thirty Three Lacs) per acre for the lands described in detail in column 2 of the Award of the Collector dated 19.08.2010 (Annexure P-3) at page 32 of the SLP paper book of C.A.No. 2846/2017 and Rs.35,00,000/- (Thirty Five Lacs) per acre in place of Rs.24,75,000/- (Twenty Four Lacs Seventy Five Thousand) per acre for lands described in detail in 3 column 1 of the said Award.

In other words, the appellants are held entitled to receive compensation for the acquired land as described hereunder: S. No. Class of Land Awarded Amount 1. Nehri, Chahi Rs.35 lacs 2. To the depth of 2 acres from Safidon-Jind Road & Safidon Bye Pass Road and Gair-mumkin land Rs.45 lacs

63. In addition to the aforesaid, the appellants are also held entitled to statutory compensation as provided in the Act and which the Courts below had already awarded to the appellants. We uphold the Award of such compensation. The two rates which we have determined above would apply to entire acquired land of all the appellants.

64. In the light of foregoing discussion, the appeals succeed and are allowed in part. The impugned judgments are partially modified in appellants’ favour by enhancing the compensation payable to appellants (claimants/landowners) in respect of their acquired land to the extent indicated above.